Sept. 26 (UPI) — President Donald Trump on Wednesday is set to unveil a Republican-backed tax reform plan that lowers taxes on businesses and many households.
Earlier, Republican House and Leaders outlined the proposal in a “unified framework for fixing our broken tax code”. Trump is scheduled to speak at 3:20 p.m. Wednesday at an appearance in Indianapolis.
The tax reform plan would decrease the current seven personal tax brackets to three — 12, 25 and 35 percent — and nearly doubles the standard deduction. Also, the child tax credit would be substantially increased.
The top individual tax rate is now 39 percent and the lowest is 10 percent.
The new plan doesn’t list the income brackets for the new rates.
For businesses, the plan would cut the tax rate from 35 percent to 20 percent and would allow companies to write off capital spending for at least five years.
In April, Trump unveiled a similar plan that he called the “biggest” tax cut ever — with the same lower rates for individuals and chopping the corporate rate to 15 percent.
Treasury Secretary Mnuchin and White House chief economic adviser Gary Cohn summarized the plan in a one-page summary Wednesday. They worked out the details with top Republicans in the House and Senate, a group that has come to be known as the “Big Six.”
The New York Times reported that Republican leaders in the House and Senate have agreed on the proposal.
“Tax reform is the most important thing we can do to restore confidence to this country, to get jobs and prosperity and that’s why we are so singularly focused on getting this done this year,” House Speaker Paul Ryan told reporters.
“This framework is focused on supporting American jobs, on making taxes fairer and on growing families’ paychecks,” Senate Majority Leader Mitch McConnell said in a statement on the Senate floor Wednesday. “It’s a refreshing change from our current outdated tax code, which for too long hasn’t worked for many Americans. The current code forces individuals, families, and small businesses to navigate a web of schedules, deductions, and penalties. Rates are too high. Incentives often make little to no sense. Some actually encourage companies to ship American jobs overseas.”
At a news conference Wednesday, Democratic leaders criticized the GOP-led proposal.
“The president’s newly unveiled tax plan shows the GOP is out of touch with working Americans,” Senate Minority Leader Charles Schumer said. “It gives a massive tax cut to the wealthiest American households at the expense of the middle class.”
Schumer said there is “no real proof, no real argument they are taking new money and putting it into jobs.”
An analysis by Americans for Tax Fairness of the tax framework shows that Trump’s tax cuts could total $6.7 to $8.3 trillion, $3 to $5 trillion of which may not be paid for by closing other tax loopholes and/or by limiting tax deductions.
“The idea that this plan would help average Americans instead of the wealthy and big corporations has been a hoax all along,” said Frank Clemente, executive director of Americans for Tax Fairness said in a statement. “This isn’t ‘tax reform,’ it’s just a big giveaway to millionaires and corporations, and it won’t ‘trickle down’ to the rest of us.”
Trump is scheduled to speak about the new plan at 3:20 p.m. EDT.