Republican party leaders, including President Donald J. Trump, will put forward a proposal to slash corporate and also personal taxes by a minimum of five trillion dollars over a period of 10 years. The revenue loss will be recouped hopefully by a number of unspecified deductions and tax breaks. The blueprint for the same is all set to be released during the last days of November. If successful, it will bring Congress Republicans and Trump to an important policy goal. The problem is that by leaving decisions on the specific tax breaks to be taken away for later negotiation, controversial choices are being delayed. This could torpedo the tax efforts being done by the party.
The Republican leaders and the Trump-occupied White House will put forward a proposal cutting the rates of the corporate tax from the present 35 percent to 20 percent. There were also a number of calls for lowering rates which are being paid by businesses enjoying high incomes. The rates of tax, in this case, is proposed to be lowered to about 25 percent. Other incentives in this plan include a number of plans designed to attract companies to invest. One of the proposed ones is to allow companies to write off all investments in materials, like equipment. The duration of the latter will be a minimum of five years.
Other than the above, the GOP will make a call to lower the individual and families' top tax bracket from the present 39.6 percent to the proposed 35 percent. They will also request the lawmakers to consider the imposition of a newer and higher rate. This will make sure that the wealthy taxpayers do not get a tax cut advantage of disproportionate means when compared with low-income and middle-class families. To do this, a higher tax rate could be imposed on them. Final decisions on the matter are pending.
Fewer tax brackets
At present, seven kinds of individual tax brackets are present. The Republican scheme is to collapse the seven into three tax brackets- 12 percent, 25 percent and the highest at 35 percent. This Republican framework may not specify the income levels initiating particular tax rates. These decisions will be taken later by the lawmakers. The GOP plan is to shield the middle class and the lower class from taxation. This could be one of the methods adopted to deliver huge tax cuts.