Capitol Hill Republicans rolled out the Tax Cuts and Jobs Act Thursday, a tax package that if passed would finally provide President Trump with his first big legislative win.
‘With this plan the typical family of four will save $1,182 a year on their taxes,’ House Speaker Paul Ryan, a Republican from Wisconsin, pledged during a roll-out press conference on Capitol Hill.
Ryan suggested the money could go toward ‘a year’s worth of gas for your car’ or the family phone bill, ‘depending on how much data your kids use,’ he said with a chuckle.
However, at the heart of the GOP’s plan is to slash the corporate tax rate from 35 to 20 percent and pay for that by killing a number of deductions, including that Americans now can subtract what they pay to local municipalities and their states when filing their federal taxes.
The Republicans’ tax plan put Americans in five tax brackets, with individuals filers not paying taxes on the first $12,000 they make
House Speaker Paul Ryan rolled out the GOP’s tax plan Thursday on Capitol Hill pledging that it would save, on average, Americans $1,182 per typical family of four
House Speaker Paul Ryan held up a postcard and pledged that tax reform would lead to most Americans being able to file their taxes on just that
The bill puts Americans into five tax brackets at zero, 12 percent, 25 percent and 35 percent tax rates, with top earners continuing to pay 39.6 percent of their income.
That top rate hits single filers who make $500,000 and more, and joint filers who make more than $1 million.
Individual filers don’t pay taxes on the first $12,000 they make.
It used to stand at $6,350.
For joint filers, the first $24,000 of income will not be taxed, if the GOP plan becomes law.
The popular retirement savings plan, 401(k)s ended up not being touched, though as of Wednesday, House Ways and Means Chairman Kevin Brady, a Republican from Texas, had wanted them on the table.
Tax deductions would be capped at $500,000 on new mortgages.
The current tax code’s cap is $1 million.
This could impact Americans living in large, high-cost cities including San Francisco, New York, Boston and Washington, D.C. – cities that didn’t vote for President Trump in last year’s presidential election.
The bill would allow people to deduct the first $10,000 of local property tax from their federal tax bill.
The legislation creates a new ‘family credit’ that bumps the child tax credit from $1,000 to $1,600.
The Wall Street Journal reports that the student loan interest deduction and the medical expense reduction are also being cut.
The wealthy will also benefit by the GOP’s plan to repeal the estate tax, which hits inheritance.
The Republicans have tried to sell that provision by pointing out that it impacts family farms.
Rep. Kristi Noem, a Republican from South Dakota, was on hand on Capitol Hill Thursday to make that point.
Noem’s father had died in an accident and then her family was hit by the estate – or as Republicans call it the ‘death’ – tax.
‘When he was killed, about a month later, we got a bill in the mail from the IRS that said we owed death taxes,’ she said, noting how unfair it was that, ‘Because you had a tragedy now you have to pay again.’
At the White House Thursday, President Trump was meeting first with GOP Senators and then would meet with Republican House leaders and also GOP members of the House Ways and Means Committee, the group tasked with writing the House bill.