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White House tax plan would cut corporate, individual tax rates

White House tax plan would cut corporate, individual tax rates

Toomey said the committees writing the tax bill will "wrestle with this and define this" in their drafting efforts.

Trump in recent weeks has sought to crank up public pressure on the need for sweeping tax reform.

Republican leaders are meeting Wednesday with rank-and-file lawmaker to sell the plan. However, even before they get into the details of the bill, they are now asking how low they can go on tax cuts.

For the top 1 percent of earners - roughly, those who make more than $465,600 a year - it would be "challenging" to close enough loopholes to offset the tax cut offered by the proposals under discussion, said Kyle Pomerleau, director of federal projects for the Tax Foundation, a Washington policy group. That's not as low as Trump wanted, but is still a huge reduction, to the lowest top rate since 1940. In fact, many more people would end up paying nothing in taxes.

Drastically lower rates for businesses. He said the U.S. has the highest business tax rate in the world and that causes business leaders to outsource jobs from overseas.

The new top tax rate for small businesses will be 25 percent.

For individuals, there is much less clarity. But it doesn't specify the income levels for each bracket. Given the president's penchant for defying the wishes of his own party, there is widespread concern among insiders that he will abandon the Big Six plan and call for 15 percent anyway. The framework calls for reducing the corporate tax rate and collapsing the seven current tax brackets into three, among other changes. Early details obtained by NBC News reveal that the large tax breaks for corporations and individuals will be an expensive endeavor. The personal exemption would also be removed, but the standard deduction would be increased. They proposed scrapping the deduction for the amount a taxpayer pays in state and local taxes, which could hurt people in high-tax states including California and NY that tend to vote Democratic.

The plan would preserve the mortgage interest deduction and the charitable giving deduction. President Trump said this will allow families to spend more time together with their children and less time filling out paperwork.

Republicans are expected to outline their tax plan this week, fueling intense speculation about how much taxes will be cut and whether the benefits will accrue mostly to rich people or also to the middle class.

As recently as this past weekend, Trump said he hoped for a 15 percent rate, which he has argued is key for USA job creation. Congress may decide to create a fourth bracket above 35 percent.

Republicans controlling Congress initially promised that the overhaul of the tax code wouldn't add to the debt. Orrin Hatch, R-Utah.

As with the individual side, some of the thornier business tax issues remain unaddressed. "It will deliver the lowest rates on our job creators in modern history and redesign the tax code so our companies can compete and win anywhere in the world, especially here at home".

"Our tax code should recognize that the most important investment we can make is in our children", said President Trump.

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