Trump is set to unveil his new tax plan on Wednesday that he’s been working out with Congress.
Here’s what we know about it thus far:
CNBC – The framework, expected to be released on Wednesday, will likely feature dramatically lower rates for most – if not all – households and businesses, according to several people familiar with the plans. However, as of Sunday night, the so-called Big Six had not yet finalized how much detail to provide on other key elements of tax reform, such as whether to allow full and immediate expensing and, perhaps most critically, how to pay for the tax cuts.
Wednesday’s announcement is not expected to include any provisions to raise revenue.
Some of the expected tax provisions include:
- A Republican familiar with the White House plans confirmed negotiators are pursuing a corporate rate of 20 percent, despite President Donald Trump’s suggestion Sunday afternoon that he would still prefer to see a 15 percent rate.
- The framework would also set a slightly higher rate of 25 percent for so-called “pass through” businesses, the person said.
- The administration is also pushing for a top individual rate of 35 percent – the same number it proposed in a one-page outline of principles in April, according to the source. But there is not yet agreement among the negotiators over what the effective rate for the wealthiest households should be.
And…
AXIOS – President Trump is planning to give a speech unveiling the Big Six framework in Indiana on Wednesday, three sources said. The framework is the starting point for the tax reform process. It reflects the shared view of the Big Six, but it will inevitably change substantially as it goes through the normal legislative processes in the House and Senate.
(The “Big Six” are House Speaker Paul Ryan, Senate Majority Leader Mitch McConnell, Treasury secretary Steven Mnuchin, White House economic adviser Gary Cohn, and the chairmen of the two tax-writing committees — Senate Finance Committee chairman Orrin Hatch and House Ways and Means chairman Kevin Brady.)
The details, per three sources with knowledge of the plan:
- Top individual tax rate cut from 39.6 to 35. The current seven income tax brackets collapsed to three, as part of simplification. (Axios hasn’t obtained the other two rates.)
- Axios can confirm that the Big Six agreed to cut the corporate tax rate from 35 percent to 20 percent. That key detail leaked last night to the Washington Post. (Trump has said he wants the corporate rate to be 15 percent.)
- The Big Six framework is also expected to include guardrails to prevent wealthy people from artificially lowering their income taxes by rearranging their affairs to get taxed at the small business rate.
- We can confirm, too, WashPo’s reporting that Republicans plan to double the standard deduction — a boost for the middle class and a key component of simplification.
It’s also been reported that there will only be three individual tax rates instead of the many that exist now.
From what we see now, it looks pretty good. I like the drop in the corporate tax rate and the dropping of the top rate. I guess we’ll find out more about the other rates on Wednesday.