Yesterday, November 2, the Republicans unveiled their own bill on reform of the tax code.
So, currently, the maximum income tax rate is 39.6% and the minimum 10%. According to the plan of the Republicans, instead of seven categories of a progressive income tax will be only three major tied to income level: 12, 25 and 35%.
It is also planned to increase tax benefits for families with children.
«This is the biggest change since 1986. The real challenge of a generation,» said one of the main authors of the reform Kevin Brady.
Here is a short list of those who will lose or win from the Republicans.
Win
Large corporations. Large businesses will receive significant tax cuts, reports The Washington Post. Corporate tax in USA is one of the highest in comparison with rates in other advanced economies. With the current 35% tax rate will reduce to 20%. In addition, companies will get new tax breaks. Presumably, this will reduce the withdrawal of profits offshore.
The richest
Inheritance tax, often called «death taxes» is planned to abolish by 2024, that is, wealthy families can pass on their estates or funds to heirs without taxes.
People who paid AMT
The bill repeals the corporate alternative minimum tax. Will be examined measures to reduce corporate double taxation.
The loser
Developers houses
The reform involves the abolition of most of the detailed deductions. The only deductions that are explicitly saved in the plan related to gifts to charity and interest on mortgage loans.
Some small business owners
The national Federation of independent business, which represents 325 thousand small businesses, has said it will not support the bill. Small business owners are allowed to pay only 30 percent of their income at a 25 percent rate. The remaining amount will be paid at the individual tax rate.
The residents of «blue States» with high taxes
Say goodbye to most of the deductions on city and state levels. More than a third of respondents in democratic – blue States such as California, new York, new Jersey and Connecticut, say that it will hurt the middle class States.
People with low income
While the bill includes many tax incentives for large businesses and wealthy Americans, about 35% of the population – those who earn little, will not receive any additional tax benefits.