Republicans Outline Biggest Tax-Code Overhaul In A Generation

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Businesses would receive huge tax cuts and many middle-class Americans would see relief under a tax overhaul outline agreed to by President Donald Trump and top congressional Republicans, according to people familiar with the plan.

Trump made his threat as members of the House Ways and Means Committee met Tuesday with the President at the White House to discuss an entirely different topic: tax reform. The president wants to cut the top federal corporate tax rate from 35 percent to 15 percent, although congressional negotiators are aiming for roughly a 20 percent rate.

In addition, the framework raises the bottom tax rate from 10 to 12 percent, which primarily affects low-income households.

The plan almost doubles the standard deduction to $12,000 for individuals and $24,000 for families. A repeal of the estate tax. Most of the money that members of the middle class would gain from the tax cut will be taken away due to eliminated deductions.

The White House and a spokeswoman for the House Ways and Means Committee did not respond to a request for comment on the Axios report, or a request to confirm the proposed standard deduction rates. Supposedly, he'll do so to "leav [e] plenty of negotiating room for the tax-writing committees in the House and Senate". About 4 in 10 say they expect taxes on the middle class to rise under Trump, while only 25 percent say taxes on the middle class will drop.

The president of Americans for Tax Reform on Sunday guaranteed tax cuts across the board - including the wealthiest Americans - in 2017, though not retroactive to 2017.

Republicans proposed eliminating some existing tax deductions, though they retain deductions for mortgage interest payments and charitable deductions. He did not say whether the tax rate for the wealthiest Americans, now at 39.6 percent would be cut, as some Republicans have advocated. White House officials have said they would create "guardrails" to prevent against this but they have not explained how.

Trump said Tuesday it was "time for both parties to come together" on taxes - though a House Democratic aide said Tuesday's meeting doesn't signal any new agreements.

Profits of small, pass-through businesses that go directly to the owners are now taxed at the individual income tax rates, often at the top level of 39.6 percent.

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But GOP leaders are confident that the prospect of major tax cuts will keep the party united in the months ahead.

Without offsets such as the closing of lucrative tax loopholes to pay for lower tax rates, the tax cuts would lose about $5 trillion in revenue over a decade, according to the non-partisan Tax Foundation think tank.

It would create a special, preferential tax rate for income from so-called "pass through" businesses, such as partnerships, S-corporations (privately held corporations that elect to be taxed as partnerships), and limited liability companies (LLCs).

Dramatically cutting corporate tax rates would not bring back the factories to the Midwest as the president promised.

"At the end of the day we'll probably focus more on tax reform and trying to get the economy going", said Rep. Mark Meadows, R-N.C., Freedom Caucus chairman.

"I think the wealthy will be pretty much where they are" in terms of tax liabilities, Trump told reporters on September 13.

Republicans already were picking at the framework, pointing up how divisions within GOP ranks can complicate efforts to overhaul taxes as has happened with the series of moves to repeal the Obama health care law.

Next, tax reform will cut rates for corporations, and if you're one of the 54.8 million Americans who works at a corporation, that directly benefits you as well.

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