WASHINGTON, D.C. – President Donald J. Trump supports a new tax plan for Americans, he says, that focuses on several key areas including the corporate tax and a bigger standard deduction.
“Your government is working for you once again, not for the donors, not the special interests, but the hardworking taxpaying citizens of our country,” President Trump said this week.
Here’s his plan:
RAISE WAGES AND BRING JOBS HOME: President Donald J. Trump supports the unified framework for tax reform to bring back jobs and raise wages for American workers.
• Most economists agree that our corporate tax rate harms American workers by keeping their wages down.
o More than 70 percent of the corporate tax burden falls on American workers, according to a Congressional Budget Office analysis.
• Cutting the corporate tax rate from 35 percent to 20 percent, as proposed in the unified framework, could boost wage growth for the median household to almost four times its current rate, according to analysis from Council of Economic Advisors (CEA).
o This increase could provide $4,000 in additional income to the average American household, according to CEA analysis.
• Corporate profits are being kept offshore, benefiting foreign workers and harming our own. In 2016, firms kept 71 percent of foreign-earned profits abroad, according to the CEA.
• Tax reforms and cuts like those in the proposed framework encourage the investment needed to create jobs so Americans can get back to work and get well-paying jobs, based on date from the Bureau of Labor Statistics.
o After President Bush’s 2003 tax cuts, the economy created 7.8 million jobs over five years.
o After President Reagan’s 1981 tax cuts, the economy created 14.8 million jobs over five years.
o After President Kennedy’s tax cuts, the economy created 12.0 million new jobs over five years.
FAIR TAXES FOR HARDWORKING AMERICANS: The unified framework will cut taxes and put in place a fair tax code for American workers.
• Double the standard deduction so that more income is taxed at zero percent.
o The first $12,000 of income for individuals and $24,000 for married couples will be income tax-free.
• Consolidate the seven existing income tax brackets for taxable income to only three brackets: 12 percent, 25 percent, and 35 percent.
• Increase the Child Tax Credit and expand it to benefit more middle-income families and eliminate the marriage penalty.
• Create a new $500 tax credit for those caring for an adult dependent or elderly loved one.
EASY TAXES FOR HARDWORKING AMERICANS: The unified framework will make taxes easy for hardworking Americans and let them recover the hours wasted on filing complicated forms.
• The vast majority of Americans will be able to file their taxes on a single sheet of paper.
o American individuals and businesses spend more than 6 billion hours complying with the tax code, according to the IRS National Taxpayer Advocate.
o Individuals spend 13 hours, on average, and $210 to comply, plan, and file their tax return each year.
o $33.7 billion is the estimated out-of-pocket costs taxpayers spent on software and professional tax services, according to the National Taxpayers Union Foundation.
• The plan repeals the Alternative Minimum Tax, which effectively requires many taxpayers to do their taxes twice.
• The plan ends the job killing “Death Tax.”
o Close to 20 percent of family business owners say planning for the death tax affects their ability to create jobs, according to Family Enterprise USA.
o In 2016, family business owners spent an average of $74,940 on insurance for the death tax and $170,800 on other planning costs, according to Family Enterprise USA