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Details of the president's tax reform plan are finally rolling out.
It looks like he has held true to his word. Low and middle income get tax cuts + almost a doubling of the standard deduction. It seems to clearly benefit the average American's bottom line.
There are some small steps toward simplification by reducing the number of brackets and eliminating special interest deductions.
Summary:
Tax brackets
Corporate taxes would drop from 35 percent to 20 percent immediately and permanently.
Companies identifying as pass-through entities will pay a reduced tax rate of 25 percent.
Standard deduction increases from $6,350 to $12,000 for individuals and $12,700 to $24,000 for married couples.
Child tax credit would increase from $1,000 to $1,600.
Federal deductions for state and local income and sales taxes will be eliminated, but local property taxes can be deducted up to $10,000.
No changes to limits on 401(k) pre-tax contributions.
Alternative Minimum Tax will be repealed.
Estate tax would kick in at $11.2 million, up from $5.49 million, but it would be fully repealed as of 2024.
Corporate profits from overseas would no longer be taxed, but there would be a minimum 10 percent tax on foreign subsidiaries.
The Alternative Minimum Tax (AMT) and the Death Tax will be both be repealed, the latter by 2024.
No repeal of Obamacare's individual mandate.
On new-home purchases, interest on loans up to $500,000 would be deductible. The current limit is $1 million.
Private universities with assets of more than $100,000 per student will pay a 1.4% excise tax on their net investment income.
Tax-exempt nonprofits can make explicit election endorsements.
Full bill here: https://apps.npr.org/documents/document.html?id=4172077-Tax-Bill-Text
It looks like he has held true to his word. Low and middle income get tax cuts + almost a doubling of the standard deduction. It seems to clearly benefit the average American's bottom line.
There are some small steps toward simplification by reducing the number of brackets and eliminating special interest deductions.
Summary:
Tax brackets
- 12%: Individual incomes up to $45,000 and $90,000 for couples.
- 25%: Individual incomes up to $200,000 and $260,000 for couples.
- 35%: Individual incomes up to $500,000 and $1 million for couples.
Corporate taxes would drop from 35 percent to 20 percent immediately and permanently.
Companies identifying as pass-through entities will pay a reduced tax rate of 25 percent.
Standard deduction increases from $6,350 to $12,000 for individuals and $12,700 to $24,000 for married couples.
Child tax credit would increase from $1,000 to $1,600.
Federal deductions for state and local income and sales taxes will be eliminated, but local property taxes can be deducted up to $10,000.
No changes to limits on 401(k) pre-tax contributions.
Alternative Minimum Tax will be repealed.
Estate tax would kick in at $11.2 million, up from $5.49 million, but it would be fully repealed as of 2024.
Corporate profits from overseas would no longer be taxed, but there would be a minimum 10 percent tax on foreign subsidiaries.
The Alternative Minimum Tax (AMT) and the Death Tax will be both be repealed, the latter by 2024.
No repeal of Obamacare's individual mandate.
On new-home purchases, interest on loans up to $500,000 would be deductible. The current limit is $1 million.
Private universities with assets of more than $100,000 per student will pay a 1.4% excise tax on their net investment income.
Tax-exempt nonprofits can make explicit election endorsements.
Full bill here: https://apps.npr.org/documents/document.html?id=4172077-Tax-Bill-Text