Tax Reform on the Horizon
Tax reform has been one of President Trump’s promises to accomplish before the end of this year. So far, the White House has taken the lead on this issue and has put out a good framework for Congress to map out their plan. After a budget is passed this week, Congress is ready to begin work on this important task. There are even sentiments of unity among the House and the Senate. Congress will need to work hard and fast to fill in the details in a short amount of time.
We all know that the current tax system is confusing and burdensome. There are currently seven income tax brackets in our tax system. President Trump has proposed that it be paired down to three- 12, 25, and 35 percent. While he did not specify what those income thresholds would be, this would certainly lower individual tax rates. This will not only be a tax reform bill, but also a tax cut bill.
In efforts to put more money back in individuals’ pockets and family households, the plan will double the standard deduction and increase the Child Tax Credit. An increased standard deduction will be available to everyone by striking personal exemptions. The hassle of itemizations will no longer be necessary.
The long-awaited repeal of the Death Tax will finally come to fruition. This tax is a gross double tax on certain estates that are being inherited by others. The current tax rate is at a whopping 40 percent. During Hillary Clinton’s campaign, she promised to raise it even higher. We can trust that this will help many families across the nation.
One of the major issues that we need to keep an eye on is making sure the current state and local tax does not remain. This has been a continued subsidy to states with high taxes and tremendous debt. Heritage Foundation estimates a ten-year loss of $1.7 billion in federal revenues because of this tax alone. This is not an aid to states, it is simply a bail-out.
With Republicans working towards the same goal, tax reform seems to be achievable before the end of this year. As details begin to surface, Eagle Forum will continue to weigh in on discussions regarding tax reform.