Congressional “Republicans” will roll out a tax reform proposal next Wednesday – their latest effort to salvage something out of what has been a disastrous year for the “governing” party in Washington, D.C.
What will the GOP tax plan look like? That’s a good question, as taxes have been a moving target since U.S. president Donald Trump first addressed them during his 2016 presidential campaign.
Back in the spring, Trump proposed collapsing the current tax code into three brackets – 35 percent, 25 percent and 10 percent, depending on the income level. He also proposed cutting the corporate tax from 35 to 15 percent.
Those proposals have gone nowhere among the GOP-controlled Congress, though.
Trump has made it abundantly clear that passing tax relief is critical to achieving his lofty economic goals. Unfortunately, his proposals have been a bridge too far for Republicans in Washington, who have proven utterly incapable of implementing the agenda items on which they campaigned.
Early reports from Capitol Hill indicate the GOP “compromise” plan will leave the top marginal tax rate at 39.6 percent – which currently applies to taxable income over $418,400.
Also reportedly no longer on the table? Trump’s plan to get rid of the death tax, which is paid on estates of $5.49 million or more.
No word yet on whether these scrapped tax cuts – which would have benefited wealthier Americans – will translate into additional tax relief for middle class taxpayers. Also, it’s not yet clear whether there will a payroll tax cut (well, a reverse of the recent payroll tax hike) associated with the latest GOP plan.
Bottom line? Significant tax relief – especially tax relief for middle class consumers – is vital if the American economy is going to get back on track. In fact, we believe failure to pass broad-based tax relief could very easily send the economy into another depression.
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