White House Unveils Proposed Tax Plan
On Wednesday, April 26, Treasury Secretary Steven Mnuchin and Director of the National Economic Council Gary Cohn announced President Trump’s proposed tax plan. Secretary Mnuchin and Director Cohn did not release many details of the plan, but what was announced could have dramatic effects on both individuals and businesses if the proposals become law.
On the individual side, President Trump’s proposed plan would:
- Reduce the top marginal rate from 39.6 percent to 35 percent
- Reduce the number of tax brackets from seven to three
- Double the standard deduction but eliminate most other deductions
- Repeal several taxes such as the alternative minimum tax and the estate tax
President Trump’s business plan introduced a few notable changes, including:
- A reduction in the corporate tax rate to 15 percent (although the details for how these cuts will be paid for were only vaguely addressed in Wednesday’s announcement)
- A reduction in the tax rate to 15 percent for small businesses (however, the proposed plan did not include a detailed explanation of how this tax rate reduction would work)
- A provision that would only require businesses to pay taxes on income earned within the U.S., which would exclude foreign sales
Although Wednesday’s announcement merely provided the broad strokes of President Trump’s tax plan, more details are expected to emerge as the summer progresses.
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