by Marcy Gordon and Andrew Taylor, Associated Press
WASHINGTON (AP) — President Donald Trump and congressional Republicans are proposing a far-reaching, $5 trillion plan Wednesday that would cut taxes for individuals and corporations, simplify the tax system and nearly double the standard deduction used by most Americans.
The plan is sweeping in scope but omits critical, controversial details that are likely to take months to work out in a bitterly divided, GOP-led Congress. The political stakes are high for Republicans and for Trump, whose agenda has largely stalled as the GOP abandoned efforts to repeal the Obama-era health law. Republicans see tax overhaul as a once-in-a-generation opportunity that could produce a large political payoff, though some polls show the public is skeptical that average Americans will benefit much.
“Too many in our country are shut out of the dynamism of the U.S. economy, which has led to the justifiable feeling that the system is rigged against hardworking Americans,” says the blueprint, obtained by The Associated Press. “With significant and meaningful tax reform and relief, we will create a fairer system that levels the playing field and extends economic opportunities to American workers, small businesses, and middle-income families.”
The public unveiling of the plan was set for later Wednesday. There are no details on how much it would cost, though back-of-the-envelope estimates by outside experts put the tax cuts in the range of $5 trillion over the next 10 years. The net cost to the federal debt would be far less — probably in the range of $1.5 trillion under deal hatched by Senate Budget Committee Republicans — and the real battles ahead will come as lawmakers quarrel over which tax breaks might be eliminated to help pay the balance.
The plan nearly doubles the standard deduction to $12,000 for individuals and $24,000 for families. This basically increases the amount of personal income that is tax-free.
It collapses the number of personal tax brackets from seven to three. By simplifying the system, most Americans would be able to file their taxes on a postcard, the plan says.
“This is our once-in-a-generation opportunity to fundamentally rethink our tax code. We can unleash the economy — promoting growth, attracting jobs, and improving American competitiveness in the global market,” said Senate Majority Leader Mitch McConnell, R-Ky. “We can lower taxes for individuals and families, so hardworking Americans are able to keep more of their hard-earned money.” full story