Republicans Unveil Plan to Overhaul U.S. Tax Code

09/27/17 10:48 AM EDT
By Richard Rubin 

WASHINGTON -- A sweeping Republican plan to overhaul the U.S. tax code proposes to sharply reduce tax rates on businesses and many individuals -- kicking off an effort by President Donald Trump and congressional leaders to build momentum for a challenging legislative push in the months ahead.

The plan, which was obtained by The Wall Street Journal, calls for a 20% corporate tax rate, down from the current 35%. Other businesses, which pay their tax bills through their owners' individual tax returns, would get a 25% top rate with unspecified rules that would prevent some wealthy business owners from paying that rate on what's considered wage income.

The individual tax rates would be set at 12%, 25% and 35%, with the option of a fourth higher rate on the highest-income households, collapsing the individual tax structure from seven brackets to three or four. The plan would repeal the estate tax and provide a one-time tax on U.S. companies' stockpiled foreign earnings.

The framework, obtained in advance of its official release later Wednesday, is designed to make the tax system simpler by repealing the alternative minimum tax and expanding the standard deduction to $12,000 for individuals and $24,000 for married couples. The child tax credit would also be increased.

(More to Come)

 

(END) Dow Jones Newswires

September 27, 2017 10:48 ET (14:48 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.