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Details about President Trump’s tax plan continue to emerge, and so far there’s a LOT to like.
On Wednesday, White House chief economic adviser Gary Cohn outlined several key details to reporters at the White House press briefing, explaining how the proposal will both encourage economic growth and simplify the tax code.
In what will be by far the most far-reaching tax reform bill since Reagan overhauled the system in 1986, the legislation is expected to reduce the number of tax brackets from seven to three as well as eliminate other taxes entirely, according to the Free Beacon.
“We’re going to cut taxes and simplify the tax code by taking the current seven tax brackets we have today and reducing them to only three brackets—a 10 percent bracket, a 25 percent bracket, and a 35 percent bracket,” Cohn told reporters.
On the chopping block? Death taxes and the much-maligned alternative minimum tax.
— Fox News (@FoxNews) April 26, 2017
“The [alternative minimum tax] creates significant complication and burdens which require taxpayers to do their taxes twice to see which is higher. That makes no sense, and we should have one simple tax code,” Cohn said. “We are going to repeal the death tax. The threat of being hit by the death tax leaves small business owners and farmers in this country to waste countless hours and resources on complicated estate planning to make sure their children aren’t hit with a huge tax when they die.”
The plan will also essentially create a zero percent tax rate by increasing the standard deduction for married couples to the first $24,000 earned, which will lead to “simplification because far fewer taxpayers will need to itemize, which means their tax form can go back, yes, to that one simple page,” according to Cohn.
On the economic side, growth will be driven by reducing capital gains and dividends taxes to 20 percent and repealing the 3.8 percent Obamacare tax on both.
In a measure even some Democrats should be able to get behind, several tax breaks for top earners will be eliminated, but long-standing deductions for charitable giving, home ownership, and retirement savings will remain in place. Additionally, families will get tax breaks for child and dependent care expenses.
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