In one of the biggest tax cut in US history, President Donald Trump on Wednesday proposed reductions in individual and corporate tax rates. With this, the number of individual income tax brackets has been reduced to three brackets and has eased the tax burden from most of the American citizens. The proposal proposes to bring down the corporate tax from current 35% to 15%. The administration has proposed to double the standard deduction but has kept the mortgage interest deduction and charitable contribution unchanged. The plan also proposes to revoke the estate tax and the alternative minimum tax.
Moreover, to lure the companies which have stationed the cash outside of the country, the plan has proposed a ‘special’ one time tax. In addition to this, the proposal has also come as a relief for those burdened with child-care costs. In its proposal, the administration has hinted towards altering of tax codes which would help families deal with child care expenses. The plan further proposes to cut 3.8% tax on investment income levied by the Affordable Care Act. The plan has also proposed to eliminate the death tax.
The plan is being hailed as one of the ‘largest tax cuts of the tax system in history’.
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Talking of the importance of the bill at a joint White House News conference, US Treasury Secretary Steven Mnuchin told reporters that the plan is aimed at giving a boost to business, create jobs and bring the massive amount of dollars back home, reported PTI. Mnuchin further said that the proposal will not only about large corporations but would also be eligible for Small and Medium size businesses. He asserted that Donald trump is “determined to unleash economic growth for businesses”. National Economic Director Gary Cohen said, “This tax reform package is about economic growth and creating jobs,”.
According to the report, the Trump administration will hold sessions with stakeholders in order to get their input. It will continue to work on the details on the plan together with the House and the Senate.