President Trump and several key members of Congress have released their proposal for federal tax reform. Their main goals are to simplify the tax code, lower tax rates, increase the competitiveness of American businesses in the international arena, and repatriate dollars currently held in offshore accounts.
Specific proposals for personal tax reform include:
- Creating a “zero tax bracket” on the first $24,000 earned by married taxpayers filing jointly and $12,000 for single filers;
- Increasing the standard deduction, child tax credit, and other forms of tax relief;
- Reducing the number of tax brackets from seven to three (12%, 25%, and 35%);
- Eliminating the Alternative Minimum Tax (AMT);
- Eliminating most itemized deductions; and
- Repealing the death tax and generation-skipping transfer tax.
With respect to business taxes, the proposal seeks to cap the corporate tax rate at 20% and adjust expense write-offs and special deductions, among other suggestions.
To read the President’s complete proposal for tax reform, click here.