Senate Republicans on Thursday unveiled a plan which would certainly chop the corporate tax rate along with also make broad tweaks to the individual tax system. which contains key differences through a bill working its way through the House.
GOP senators contend the tax system overhaul will ease the burden on middle-income Americans while encouraging companies to boost hiring along with also wages.
Trimming the tax burden on businesses along with also individuals has long been a Republican goal. With unified control of the White House along with also both chambers of Congress, the GOP aims to pass a tax reform plan which year, despite lingering challenges.
Issues facing GOP lawmakers include budget deficits generated by the deep cuts, opposition through blue-state House Republicans along with also backlash through Democrats who say the proposals will not go far enough to help middle-class workers.
Here are some of the key features of the Senate plan, much of which was outlined by the Senate Finance Committee:
- The proposal chops the corporate tax rate through 35 percent to 20 percent. which would certainly delay the change until 2019, a source told CNBC. from the House bill, which measure would certainly take effect next year.
- The Senate plan would certainly keep seven individual income tax brackets, a source told CNBC. A 12 percent bracket would certainly replace the current 15 percent, while the top rate would certainly get cut slightly to 38.5 percent. The House plan would certainly reduce the number of brackets to four.
- Like the House bill, the Senate proposal would certainly nearly double the standard deduction to $12,000 for individuals along with also $24,000 for married couples.
- The Senate plan would certainly eliminate federal deductions for state along with also local taxes. The House bill also has which.
- which would certainly not change the mortgage interest deduction, which allows deductions on interest for up to $1 million in mortgage debt. The House bill caps which figure at $500,000.
- which keeps well-liked tax breaks for 401(k) retirement accounts along with also charitable contributions.
- which aims to reduce the burden on pass-through businesses by adding a deduction.
- The Senate plan increases the child tax credit through $1,000 to $1,650.
- The proposal doubles the exemption for the estate tax, or so-called death tax, nevertheless does not eliminate which. The House plan repeals the estate tax after six years.
The House Ways along with also Means Committee voted Thursday to advance its tax bill. Committee Chairman Rep. Kevin Brady, R-Texas, made improvements to the proposal ahead of the vote.
House Majority Leader Kevin McCarthy, R-Calif., on Thursday said the full House would certainly vote on the proposal next week.