10 things you need to know about the GOP tax plan

The ambitious tax overhaul unveiled by President Donald Trump and Republican lawmakers Wednesday is drawing both praise and skepticism.

“This is a revolutionary change, and the biggest winners will be middle class workers as jobs start pouring into our country, as companies start competing for American labor, and as wages continue to grow,”  Trump said of his tax plan at an event in Indiana.

Here’s what you need to know about the much anticipated reform effort.

1) Pro-growth is the key

On the campaign trail, Trump said he’d like to get the nation’s highest-in-the-world corporate tax rate down to 15 percent in an effort to spur industry reinvestment in the U.S.

The current plan wouldn’t quite hit that ambitious goal– but it does call for an impressive slashing of the rate from the current 35 percent down to 20 percent.

In addition, the GOP plan contains provisions that would allow U.S. companies to repatriate profits they’re currently stashing overseas without being slapped with the nation’s current 35 percent tax. That could be a big incentive for businesses like Apple, which currently has around $246 billion stashed in offshore accounts. The plan would allow businesses to pay a one-time tax bringing profits back, either as a lump sum or over time and implement a territorial tax system that would prevent them from being double taxed on future overseas earnings.

2) Tax brackets could change

Trump’s proposal would reduce the current seven federal income tax brackets down to just three: 12 percent, 25 percent and 35 percent. The proposed new brackets create a slight bump in the bottom individual tax rate (currently 10 percent) and a slight drop at the highest rate (currently 39.6 percent). But that doesn’t mean the nation’s highest income earners are going to be looking forward to a massive tax break if the plan passes. The administration wants the new code to be at least as progressive as the current code when it comes to taxing millionaires and billionaires, and is leaving the door open for the addition of another top bracket for the uber wealthy.

Critics claiming that the plan increases taxes on the poorest Americans may also be wrong because…

3) The standard deduction would nearly double

Trump’s proposal increases the amount of income that is tax free, the standard deduction, to $12,000 for single filers and $24,000 for families, up from the current respective cutoffs of $6,350 and $12,700

4) Families would also benefit from an increased child tax credit

A nod to Ivanka Trump’s efforts to make life easier for working parents in the U.S., the Trump tax plan would make the first $1,000 of the child tax credit refundable and phase the credit out at a higher income bracket.

5) More simplification via elimination of most itemized deductions

Only the mortgage deduction, charitable tax deduction and deductions related to higher education are specifically protected under the proposal.

6) The elimination of state and local tax deductions is bad news for elitist Democrat locales

New York Gov. Andrew Cuomo has whimpered that losing the state and local deductions would be a “death blow” for his state, where about 35 percent of filers are writing off local taxes on federal returns. Also in trouble under the proposal are high-tax enclaves like New Jersey, Connecticut and California.

7) The Death Tax is also on the chopping block

“The framework repeals the death tax and the generation-skipping transfer tax,” the plan says. In a nutshell, the proposal would do away with taxes currently levied against estates worth more than around $5 million.

8) Democrats HATE the Trump proposal

Get used to hearing the phrase “giveaway for the rich” over and over. That’s how the left is categorizing the plan. Vermont Sen. Bernie Sanders went so far as calling it “morally repugnant and bad economic policy.”

Senate Minority Leader Chuck Schumer called it “wealthfare.”

“It seems that President Trump and Republicans have designed their plan to be cheered in the country clubs and the corporate boardrooms,” he said on the floor o the Senate.

9) This is the most unified we’ve seen the GOP establishment and conservative factions in months 

The House Freedom Caucus, which has frequently been at odds with Trump and more mainstream Republicans in recent months, is championing he proposed reforms.

“President Trump has delivered a forward looking tax reform framework that will let hard working Americans keep more of their money, simplify our system, end carve outs for special interests, and will help make our businesses competitive abroad,” it said in a statement.

Americans for Tax Reform founder Grover Norquist, meanwhile, said it passes the test of creating a system  that will allow most Americans to file their taxes on a postcard.

“The Republican tax reform plan will turbo-charge the economy, create millions of new jobs and make America the best place in the world to invest, build and create,” he said.

And Heritage Foundation CEO Michael A. Needham said: “If enacted, there is no doubt such a plan would unleash economic growth, create jobs and increase wages.”

10) There are still plenty of unknowns

As Congress gets busy filling in the blanks on things like income ranges for the revised bracket structure and developing an understanding of the new plan’s budget reconciliation details, there are going to be a lot of changes and hurdles. And Trump has made clear that he’s looking for major Democrat input as well. By the time the thing is ironed out, it could (will) look totally different than the current proposal. And as far as a timeline goes, most watchers are saying expecting anything close to a finished package by the end of the year is overly ambitious.

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