WASHINGTON (KEVN) - House Republicans released a tax reform package that is drawing praise from President Trump and opposition from Democrats. Where the taxpayer stands in the debate has yet to be determined.
While Senator John Thune says he commends the house for its work, GOP lawmakers from high-tax states like New York and New Jersey have mixed opinions about an aspect of the plan that will permit taxpayers to continue to be able to deduct property taxes but lose the deduction for state income taxes.
For the individual taxpayer: The standard deduction is nearly doubled for single people ($12,000) and married couples ($24,000); and to $18,000 for heads of household. Personal exemptions and the additional standard deduction for the elderly or blind would be dropped.
The seven tax brackets (which go from 10 to 39.6 percent) would be trimmed to four brackets. Examples for married couples:
• No tax - $0 to $24,000 (used to be 10 percent)
• 12 percent – up to $90,000 (used to be 15 percent)
• 25 percent - $90,000 to $260,000 (used to be from 25 to 28 percent)
• 35 percent - $260,000 to $1 million (used to be 33 to 35 percent)
• 39.6 percent – more than $1 million (remains unchanged)
The reform plan is supposed to streamline filing and help generate jobs.
Republicans claim the new tax structure means small businesses will not be taxed above 25 percent. However, the National Federation of Independent Business, a powerful GOP-leaning trade association, says too many small businesses currently taxed at individual rates of up to 39.6 percent won't be able to take advantage of the new 25 percent top tax rate.
Here is a link to the summary of the GOP’s Tax Cuts and Jobs Act.