Yesterday, House Republicans finally unveiled their 2018 tax plan, and as we reported, there’s plenty in it to like. There’s a balance of tax cuts that are “paid for” in part by limiting deductions that disproportionately benefit higher earners – most prominently in blue states.
Among the highlights of the tax plan include:
- Lowering individual tax rates for low- and middle-income Americans to Zero, 12%, 25%, and 35%; keeps tax rate for those making over $1 million at 39.6%
- Increasing the standard deduction from $6,350 to $12,000 for individuals and $12,700 to $24,000 for married couples.
- Establishing a new Family Credit, which includes expanding the Child Tax Credit from $1,000 to $1,600
- Preserving the Child and Dependent Care Tax Credit
- Preserving the Earned Income Tax Credit
- Preserving the home mortgage interest deduction for existing mortgages and maintains the home mortgage interest deduction for newly purchased homes up to $500,000, half the current $1,000,000
- Continuing to allow people to write off the cost of state and local property taxes up to $10,000
- Repealing the Alternative Minimum Tax
- Lowering the corporate tax rate to 20% – down from 35%
- Reducing the tax rate on business income to no more than 25%
- Establishing strong safeguards to distinguish between individual wage income and “pass-through” business income
- Allowing businesses to immediately write off the full cost of new equipment
- Retaining the low-income housing tax credit
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