As advertised, President Trump’s revised tax reform plan was rolled out on April 26, but not by the president himself. That honor was left to Treasury Secretary Steven Mnuchin and National Economic Council Director Gary Cohn at a White House press briefing.
The plan leaves plenty of blanks to be filled in later this year, but much of what was said sounds familiar to promises made on the campaign trail and during the president’s first few months in office.
Keeping that in mind, here are nine key proposals that form the core of the White House’s tax reform agenda:
1. Individual tax cuts. Once again, President Trump has proposed a three-tier system to replace the current seven-bracket setup. This time, the president has proposed rates of 10 percent, 25 percent, and 35 percent. During his campaign, Trump had considered rates of 12 percent, 25 percent, and 33 percent.
Currently, the bottom rate is 10 percent, while the top rate is 39.6 percent.
2. Standard deduction. For 2017, the standard deduction is $6,350 for single filers and $12,700 for joint filers. Trump’s goal is to double these amounts going forward. That would provide a big boost to lower-to-middle-income filers who don’t itemize deductions.
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3. Itemized deductions. Trump plans to make good on prior threats to repeal all itemized deductions except those for charitable contributions and mortgage interest. That could, however, be damaging to residents in states where property taxes and state and local income taxes are high. Expect some pushback from lawmakers in those jurisdictions.
4. Corporate tax rates. Individuals would not be the only ones benefiting from tax rate cuts. The president’s tax reform plan has long included reducing the top corporate rate from 35 percent to 15 percent. Not surprisingly, business leaders completely support this proposed change.
About Ken Berry
Ken Berry, Esq., is a nationally known writer and editor specializing in tax, financial, and legal matters. During his long career, he has served as managing editor of a publisher of content-based marketing tools and vice president of an online continuing education company. As a freelance writer, Ken has authored thousands of articles for a wide variety of newsletters, magazines, and other periodicals.