US President Donald Trump and Republicans have come together on a tax cut plan which aims to enhance America’s economy competitiveness.
The plan includes:
- Slashing corporate tax to 20% from 35%;
- Shrinking the current seven tax brackets for personal income tax (with a top marginal rate of 39.6%) into three: 12%, 25% and 35%;
- Allowing businesses to immediately write off the cost of new investments for at least five years
- Offering a one-time tax concession for repatriating offshore profits
- Shifting to a territorial taxation system
- Repealing the inheritance tax and the alternative minimum tax (AMT)
In a press statement, House Speaker Paul Ryan said this unified framework will deliver a 21st century tax code that is built for growth, supports middle-class families, defends our workers, protects our jobs, and puts America first. It will also deliver fiscally responsible tax reform by broadening the tax base, closing loopholes and growing the economy.
“Today, we move one step closer to fixing our broken tax code so that it puts Americans first,” Mr Ryan said. “This is our best opportunity in a generation to deliver real middle-class tax relief, create jobs here at home, and fuel unprecedented economic growth. It has been 31 years since we last got this done, and hardworking families and small businesses cannot afford to wait any longer. Under President Trump’s leadership, we are determined to finally give the American people the simpler, fairer, and more competitive tax system they deserve.”
The plan will become a basis for Republicans to negotiate the federal budget. The budget process is expected to start next week in the Senate.
The full framework can be found here, and a one page overview can be found here.
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