President Donald Trump wants to simplify the personal tax code by cutting rates and eliminating deductions used by more affluent Americans.
White House economic adviser Gary Cohn says the plan would cut the top income tax rate from 39.6 percent to 35 percent. It also would reduce the number of personal income tax brackets to three from seven. The new tax rates would be 10 percent, 25 percent and 35 percent.
The plan would double the standard deduction for married couples to $24,000, while keeping deductions for charitable giving and mortgage interest payments. The plan would trim other deductions used by high-income Americans, including state and local tax payments.
It would also repeal the estate tax, the catch-all alternative minimum tax and the 3.8 percent tax on investment income from President Barack Obama’s health care law.
Treasury Secretary Steve Mnuchin says President Trump’s tax plan will amount to – in Mnuchin’s words – “the biggest tax cut” and the “largest tax reform” in U.S. history.
Mnuchin gave that description during a speech in Washington on Wednesday morning.
Trump wants cuts for individuals and businesses, even as the government struggles with mounting debt. The president is trying to make good on promises to bring jobs and prosperity to the middle class.
House and Senate Republican leaders offered mild praise for President Donald Trump’s outline to overhaul the nation’s tax code.
In a joint statement, Senate Majority Leader Mitch McConnell and House Speaker Paul Ryan said the principles released by the Trump administration would serve as “critical guideposts” for overhauling the tax system.
They praised lower tax rates for families and businesses. They said they are confident they can work with the White House to rebuild the tax code in a way that will grow the economy, promote savings and investment and “bring prosperity to all Americans.”
McConnell and Ryan issued the statement along with Senate Finance Committee Chairman Orrin Hatch and House Ways and Means Committee member Kevin Brady.