Politics

Republicans Unveil Their Framework for Tax Reform

taxes tax reformRepublican leadership took a major step in its goal to reform the tax code Wednesday by releasing a framework which details what the final bill may look like.

Republicans have worked for nearly two years in their most recent push to fundamentally reform the tax code. Their focus on rate reductions and simplification have remained a pivotal part of their plan throughout the process. President Donald Trump is scheduled to discuss the new framework later in Indianapolis, Indiana.

“Today, we move one step closer to fixing our broken tax code so that it puts Americans first,” House Speaker Paul Ryan said in a statement. “This is our best opportunity in a generation to deliver real middle-class tax relief, create jobs here at home, and fuel unprecedented economic growth.”

The tax reform framework reduces the seven current income brackets down to three. The top individual tax rate at 39.6 percent will be reduced to 35 percent. The framework also taxes middle-income earners at 25 percent, and lower-income earners at a slightly higher rate of 12 percent. It does leave room for lawmakers to add an additional top rate for high earners.

Republicans hope to boost economic growth through tax reform. The framework reduces rates for corporations down to 20 percent. The top rate for corporations is currently at 35 percent, which is one of the highest rates in the world. This high rate has led companies to keep more of their profits overseas or move their corporate headquarters abroad.

The GOP tax plan also limits the rate paid by small and family-owned businesses to 25 percent. The new rate limit is lower than the top rate that these businesses currently pay. These earnings are typically taxed as pass-through income to the owners.

Republicans hope to simplify the tax code by eliminating tax breaks that primarily benefit the wealthy. The framework also repeals the alternative minimum tax and the death tax. Homeownership and charitable gift tax deductions will be protected under the plan.

Trump has focused much of his agenda of keeping jobs from going overseas. The tax framework reflects that push by including a one-time tax on businesses keeping offshore profits. It also switches to a territorial tax system which is designed to benefit companies that keep operations within the country.

The tax system hasn’t been reformed in a comprehensive way since 1986. The Congressional Budget Office (CBO) found in an analysis that many other developed countries have been moving towards a more competitive tax system in the decades since.

“It has been 31 years since we last got this done, and hardworking families and small businesses cannot afford to wait any longer,” Ryan said. “Under President Trump’s leadership, we are determined to finally give the American people the simpler, fairer, and more competitive tax system they deserve.”

The tax reform framework comes after nearly a year of hearings and internal discussions that built upon previous policy drafts. House Speaker Paul Ryan and Rep. Kevin Brady introduced a blueprint last year which outlined their earlier policy goals. Trump later released a summary plan which included many of the same provisions April 26.

Republican leadership spent the last week ensuring party members had the chance to hammer out any last minute details. Republicans held a two-day private retreat so that they could hash out the details openly. The approach may help them avoid problems that caused their healthcare reform efforts to falter.

The National Taxpayers Union Foundation found in a 2015 study that the economy loses $233.8 billion and 6.1 billion hours of lost productivity annually because of the complex tax code. The Government Accountability Office found in a 2014 study that the tax code is so complex that very few professional tax preparers are able to calculate the correct tax refund.

The budget is also likely to play a pivotal role in getting tax reform passed. Republicans will only need a simple majority if they include tax reform as part of the reconciliation process. Republicans have to first pass a budget that includes provisions for tax reform for it to be included in that process. Democrats as a whole aren’t likely to support the eventual tax reform bill making party unity and a simple majority vote a necessity.

from - InsideSources.com - by Connor D. Wolf

If You Enjoy Articles Like This - Subscribe to the AMAC Daily Newsletter!

Sign Up Today

Leave a Reply

109 Comments on "Republicans Unveil Their Framework for Tax Reform"

Notify of
Sort by:   newest | oldest | most voted

I’ll believe it when I see it. In the meanwhile I’ll be expecting the usual failures, excuses, and caving in to minority party that we’ve seen on everything thus far. All talk, no action from the RINO swamp.

Yes We need to speak out against Mitch McConnell and others on the Trump Admin, if they are not really going to back this up

Louis, McConnell plus Ryan and all the other “big 6” committee for tax reform are nothing but traitorous RINO’s to begin with!
I trust none of them to care about the constituents they were voted in by or any citizen of this country!
We need to get rid of all the career politicians that feed off of us like parasites and in return do really nothing that is in our favor!

Angela, I think many of us are waking up to this fact. McConnell and his elite cronies are guided by powerful allies, not the average working person.

I trust nothing whatsoever that has the signatures of those non-representatives on it. they’ve long since lost any credibility as far as doing anything in our best interest.

Hmmm, do you think Shumer, Pelosi, & the Dems truly care about us? If yes, you have bought into the old “feel your pain” B.S. hook, line, & sinker. And frankly, why would you expect them to care about the voters anyway? LOL. In all honesty, our representatives need to work for the good of a nation as a whole, not special interests or individuals. Governance looks much different from that viewpoint. But lots of Americans expect government to direct everything…an impossible task even if Congress did a reasonably good job!

Jeff B., I agree that Republicans have been pretty lame in getting rid of ObamaCare. (BTW, our group rates only went up 38% this year – wahoo!). After that fiasco, I decided to pressure my reps, phone calls, e-mails, letters – as much as possible to keep their feet to the fire. So I hope you do the same…

These so called representatives are the mafia, be they democrat or republican it doesn’t matter and I worry I will be assassinated.

Jeff if you only knew what this reform would actually do to taxpayers lives you would not be in such a hurry for it to become reality!!

Angela, SHAME on you for using scare tactics in some of your comments. You sound suspiciously like a lefty. That’s one of the progressive left’s favorite ways to frame an “argument”. I think you are purposely spreading “fake news”. READERS BEWARE.

i hear so many rumors, from people pushing their own narritive. i have heard that our property and mortgage tax deductions will eliminated . i can only hope that i fall into a lower tax bracket, as i am retired now , it could hurt me. i voted for the Trumpster and i know he is trying his best to help us citizens in the united states!!!!! i will always have his back!!!! pjz

Yes. Property taxes are a big portion of my expenses. If this deduction is not allowed wouldn’t it be double taxation?

I don’t think the mortgage interest deduction is being eliminated, not sure about property taxes. What MAY be eliminated is the deduction for state income tax paid. But details are not yet fully defined, and you can bet BIG MEDIA will not tell us.

Paul, if you read my earlier comment (long) I gave a couple examples
Didn’t give any for fixed income or lower income or anyone who is confined to a nursing home or such
So : bracket/ rates will cause many who would normally fall in a low bracket such as 10% (gone now with reform) would now find themselves in a 12, 25 or 33% rate!
A divorced Mom with 3 small children, no help from dad, 20,000 income. Normally zeros out so no tax, would now owe 600.
Nursing homes fees current can be deducted on medical part of Sch A and help knock down or eliminate tax liability reform no Sch A so lots of tax to pay
It plays out like this in just about every scenario unfortunately

I think Angela is giving out bad info. From all I am hearing, some deductions will be eliminated, but standard deductions are increasing, as are earned income credits. So for most folks, at worst it is a “wash”, but lower income earners may get even MORE back.

Why would or should lower income people get back and not pay income tax?? That is the beauty of the flat rate. My 2015 taxes consisted of 41 pages and I am retired and on social security with a small amount of rental income.

Well David, I don’t like folks getting more tax $ back than they paid in either. However, I usually agree it is one good way to incentivize actually working vs. collecting welfare. If a couple makes up to $50k a year, has 2 or 3 kids, that Earned Income credit really helps. If that couple keeps working, hopefully they have the ambition to improve themselves & get better jobs. I think of this credit like I do all the tax $$$ I pay to support public schools. Better education = better income, more family stability, more taxes paid. I don’t have kids, so I’ve paid in lots for no personal gain.

Why should anyone not pay any taxes? They should pay the same rate as everyone else. The government has the tax system so screwed up it is ridiculous. Why would we expect anything different? Make it a flat tax for everyone and no deductions or other write offs.

Angela, I would like to recalculate my taxes from last year using this newly proposed plan. Where is the post card and instructions? How do I do it? Can you help us?? You seem to have some good thoughts and ideas!!

Stinger I am happy to Take your last tax return The number at the top of backside or 2nd page of 1040. If you itemized pretty much guaranteed to change the results 1. Ok your AGI (adjusted gross income) top of 2nd page or bottom last line of page 1 or front of 1040 2. Subtract 12,000 if single or 24,000 if married 3. This is now your taxable income 4. You will multiply this number by your tax rate which is: Single: 12% if under 37,500 25% if between 37501 & 112,500 35% (they keep increasing rates and lowering deductions) 112,501 or more Married 12% under 75,000 25% between 75,001-225,000 35% for 225,001 or more 5. Remember no deductions for exemptions or itemizing or current standard deduction 6. Add any extra tax to your result if any such as 10% penalty on early withdrawal of retirement or self employment… Read more »

Well uneducated person enjoy the streets as your soon to be address!!!

Angela, you must be a Democrat…this comment is meant to SCARE people, a typical manipulative tactic used by the left. Shame on you.

Having read the previous comments, it appears that Angela does not like the proposed tax reform. It also appears that the philosophic reason for her opposition is that, despite her claims to be “conservative”, her primary belief is that anyone who makes less money than someone else has a right to take, by force if necessary, from the more “fortunate” for the benefit of those who claim to be less so. Her thesis appears to be that a purpose of government is to decide what is “fair” and to redistribute from the “rich” to the less rich. Unfortunately there is no consistent definition of “Fair”. Mine is that everyone, whether one makes $200 or $200 million, should contribute an equal percentage in taxes. In my view, it is not for Angela or anyone else to decide how much is “too much” income, or whether someone’s income is more than that… Read more »

Mike you are so wrong
I don’t think anyone needs to be punished because they try to succeed in life! I am not talking about rich just normal every day citizens trying to survive and make something of themselves!
If you work hard why should you be expected to lose everything you worked for to give it away? Is that not socialism??

I’ll believe it once it is law. The alternative minimum tax is a haven for illegal immigrants. They get a refund because the system “assumes” they paid taxes when in reality many either collect welfare dollars in some form or fashion or receive cash payments for services rendered.
Currently the top 10% of wage earners pay 70% of all federal income tax. An additional tax on “the rich”, or an elimination of high income deductions does nothing to grow the economy. The only reason those items are in the proposal is because swamp dwelling politicians of both parties want to appeal to the masses so they can get reelected.
I am NOT in that upper 10% but I am smart enough to recognize that ALL of us either now work for someone in that category or retired after working for someone in that category.

At this point of my life, just due it, I got taxed out of business twice.. I want my kids to be able to Succeed..

For years now, I have filed income taxes with the help of a professional, scrupulously honest, not trying to pull any fast one. I minimize what is deducted from my paycheck as much as possible. Still I get back several TIMES the amount that was deducted from my paycheck over the year. If my income is such that there is no tax due, shouldn’t I only get returned what they siphoned out of my paychecks, nothing more? Even though this is monetarily in my favor, it sounds like a socialist wealth redistribution scheme. After the deep hole the last pretender in the White House dug for us, can America still afford the socialist pipe dream?

I agree with simplifying the system. It is convoluted and complex. I do not agree with the further flogging of more taxes out of the middle class. We are being penalized for working!

The problem is and will continue to be mitch “do nothing, know nothing” mcconnell. A more useless senator never existed. If and when this tax overhaul gets done i will believe it when i see it. Most of these fools will reject it simply because its trump, they wont realize or care its in the best interest of this country, not one group but the country that will benefit. The argument will go on as it always does, its a tax cut for the rich! What poor man ever gave you a job?

Oh I think Mitch McConnell knows what he’s doing and I think he’s getting a lot done if you consider his undermining the Trump agenda and advocating for the lobbyists and establishment elites instead of the average citizen
Don’t underestimate his ability to pull the invisible strings
You think his resistance to changing the Senate rules to aid the Republican majority is an oversight

Mike I agree McConnell is worthless (many of them are) BUT you couldn’t be more wrong about the country benefiting from current tax reform plan!! This will be a disaster for the majority of the country (well government will be very rich with their newfound money well-US the taxpayers!!)
Only low income States and same states that are not high tax States will benefit!!
These states that will benefit don’t need current code to change any way!!!

It is a tax cut for the rich.

Those would be the same rich who already pay 70% of the federal income taxes and invest and RISK their own money in expanding or starting businesses which create jobs and careers
That is unless they are an establishment crony

Thank you for this helpful summary of the new tax law. As a retired professor of social theory and history, I especially appreciate your in-depth approach.

It’s about time. A flat tax would also work every pay check that way no one would half to ever file again.

Clem be very careful what you wish for! Our founding fathers were very smart to create the progressive tax rates that made the tax fair for income levels.
Flat tax is the worst thing you could ever have. Also are you forgetting the National sales tax that always comes with flat tax? This tax is ON TOP of your state sales tax!!
Plus say they start with 10% flat tax and 9% national sales tax plus state sales tax, then they decide oops not enough and raise flat tax to 50%
Nothing can be done because they are NOT changing the LAW only a NUMBER so they can do as they please!

I’m curious which founding fathers created progressive income tax rates, since income taxation was prohibited by the Constitution until 1913. Do you consider politicians of 1913 to be “founding fathers”? I imagine for most Americans that would be an unusual view.

Mike, that is not entirely accurate. On July 14, 1798, the Fifth Congress, Session II, Chapter 77, laid the first direct tax on the United States of America in the amount of 2 million dollars. It was to be laid upon the United States of America and apportioned to the states respectively, as per the Constitution. In 1895, the U.S. Supreme Court decided Pollock v. Farmers Loan Trust Co., striking down the federal income tax of 1894 based upon the Constitution that states direct taxes must be apportioned by state population under the Constitution, so the 1894 income tax law was voided. So an income tax did exist prior to the 16th Amendment. Whether the income tax of today is a lawful tax has been the subject of much debate which the courts have largely refused to address. Article 1, Section 9, Clause 4 of the Constitution states: “No capitation,… Read more »
Except it appears the 1798 tax was not an income tax, and it was not progressive, so as James said the Founders did not impose an income tax. The 1798 tax seems to have been a tax on sources of income: it was a property tax. And it was apportioned among the states, meaning that the amount of tax collected from each state from the source had to be proportional to a state’s population in the USA. This meant the citizens of some states would be paying higher rates than those in other states. So technically it is correct an income tax could be imposed, but the imposition of direct taxes was intentionally made onerous to states so it likely would be difficult to do so. It also appears that that 1798 law was not particularly successful and it was repealed in 1802. Actual direct income taxes, even though at… Read more »
Every change in a tax rate requires a change of law, because the rates are established by law. The rate is not just a number; it is a number encoded in law. This proposed tax reform (lower rates) is a change of tax law. Of course rates can change in the future, regardless of the type of tax or the current rate. The income tax started at 3% for high earners; the marginal rate has been as high as 90%. Rates go up and down depending primarily on who controls Congress (and state legislatures for state taxes). Your tax rate and the absolute amount you pay in taxes depends way more on who is elected than it does on the kind of tax your politicians impose. The complication of the tax code is there in part for a reason: to make it difficult for taxpayers to know just how much… Read more »
#1- Our Founding fathers did not create any income tax. In 1909, Congress passed the 16th amendment that gave THEM the power to collect taxes on income. The states ratified it in 1913. Unfortunately, Republicans were in power when it passed. #2- A “Flat Tax” with an exclusion up to whatever the government determines the poverty level is, during the prior year is potentially the best for everyone and the simplest to understand. Add a “surcharge” for incomes over $1,000,000. Then Congress could not decide “winners” and “losers”. When they raised taxes it would definitely be noticeable. How many times have you heard them claim a “Tax Reduction” and yours and all of your neighbors taxes went up? #3- A “National Sales Tax” always sounds good because everyone would pay but would the “Rich” really Buy enough to pay their share? #4- The mortgage deduction really only helps the “Richest”… Read more »

All good valid points but the rich tend to by more ‘rich’ stuff so don’t look at it from a narrow perspective. And the poor don’t normally create jobs, it usually takes money and investment.

James I hope you didn’t multiply

As in reproduce, in case you couldn’t figure it out

That was not the founding fathers doing
The progressives snuck it in.
Thanks Mike

Seriously so many uneducated people?? Or just mindless blind sheep!!

Most of it sounds good. Wait and see if the Republican Congress can pull it off. They have been a disappointment thus far. I think Trump is doing extremely well considering he is getting little support from his own party and constant criticism from the media and much of congress.

Jean I agree with Trump part and disappointing part of politicians, but the reform is NOT good for the majority of taxpayers! Hopefully you will never find out due to it not passing I hope!
I voted for Trump and am a very conservative citizen but I also know tax laws and the current one, albeit confusing for many , still comes out better in so many ways for taxpayers than this so called benefit to us by the reform they want

The law is confusing on purpose to help people who get the special breaks written for them
Simplification is fair for everyone except the loophole finders who can afford the tax accountants.

I certainly pray that this will go through. The big question is whether the rinos will buck up amd do what’s right or be bought off (or blackmailed) into fighting against it.

This proposed tax bill is designed to help the rich get richer. Keep the tax rates that now exist. Do not add any more refundable tax credits. Eliminate the alternative tax which taxes mostly the middle class. Keep the deductions for property tax and sales tax. they help the middle class. This tax bill is not specific enough as to the limits or incomes that will be taxed under the projected percents. Small business tax rate is not a big concern. The advantage will be to large corporations. There is no concern for paying off our 20 trillion debt. The top 1% will benefit in the millions/billions and the lower tax payers get forms of federal welfare which keeps a lot of people from seeking employment. The balance — 99% get the bones with no meat.

Faith I certainly pray it will NOT because it will be putting many people on the streets and in debtors prisons (that will have to come back probably)

Everyone needs to do a lot more research on this reform plan before making assumptions by what they tell you remember who’s telling you it’s great, the ones who created it, and they are proven to not be trusted!!!

Find an Enrolled Agent that is an expert in tax laws/codes and have them show you the consequences of the plan!

Complication is make work for accountants and lawyers,simplification can be fair for all people.

Fair Tax plan explained by Neal Boortz on his podcasts seems like a great idea. I have no confidence in Mitch McConnell in standing by anything Trump proposes. This Fair Tax plan needs serious viewing imo

Louis fair tax same as flat tax see my earlier reply to Clem on flat tax consequences

I like what I’ve read. Naturally the regressives obstructionists and RINOS will hate it. But just remember this , people who dont pay any taxes can not get a reduction.

But people that don’t pay any taxes now, do get “earned income credits”, which means that the non-tax payers “refunds” are being paid by the tax payers.

Then take EIC away and leave everything else that actually benefits us alone

Mary please look into this a lot deeper! You will then see it is not what the RINO’s in charge of creating it claim it to be!
Remember who the big 6 are and that those 6 have already shown their true colors which are NOT red, white and blue!!

So let see mr Frumps tax returns.

Anything helps.
Americans mainly only see or think about taxes by yearly exposure to filing their federal tax return, but there are far more taxes of different kinds we pay we never even think about. There’s sales taxes, which can easily be 13% on items you buy at the store, property tax, excise taxes like on gasoline, state and local income tax and even hidden taxes on goods before they reach stores and are hidden in the price of the goods. Years ago I read an article on taxes and it stated the average American paid close to 50% of their gross income in taxes.

I forgot to mention the taxes on your utility, phone and entertainment bills too. Taxes are everywhere if you look.

Bob l true but if the reform as it is stands we WILL be paying even MORE taxes!!

What do you feel would be the best, easiest, and fairest taxation system? I am 87, on a fixed income (SS, pension, annuity), widowed, retired, have co-signed on two children’s mortgages, live in Utah, and hire a tax accountant to do my taxes.

Not sure this goes far enough make a difference in the tax code. The whole IRS should be eliminated and a unified tax plan implemented, something that is simple such as a flat tax program.

John you CANNOT be serious!!
Aaahhh!!!!
Please help us! (This is NOT just aimed at you John)
Does anyone think for themselves any more?
Does anyone research and try to understand what thing entail??
Obviously NOT

as described above it sounds like a positive plan to help get America out of its economic slump…at least in part.

While the general idea of tax reform is a plus, especially that of removing the unlawful “death tax” which is theft as it is double taxation, why have the republicans spent more time fighting President Trump than they have solving problems? It is clear that the gop establishment hates President Trump as much as the dnc, so why should we trust the gop at all? I for one no longer consider myself a republican but an independent. I also believe the evidence is clear that both parties are totally corrupt running what amounts to an organized crime syndicate for which they should be arrested under RICO statutes.

This is a death blow for seniors. Why? Under the current law, once you enter an adult care home for medical reasons, all of the expenses are deductible as medical expenses; therefore, when you take money out of a taxable retirement account or an annuity to pay for those expenses, there is little or no tax impact due to the retirement income being offset by the medical expenses. Under Trump’s plan, there would be no deduction for the adult care home expenses or any other medical expenses, which means that all of the money you take out of the retirement accounts or annuity will be 100% taxable. Now some people will say that you are getting a doubling of your standard deduction; however, with adult care home costs running between $5,000 and $10,000 per month, or $60,000 and $120,000, that additional standard deduction does little for you. What is my… Read more »

I really don’t know what the Problem is except for the Islamic Muslim Lawmakers that are common crooks. Make a tax reduction over time a percent at a time with times for credits to leave the Tax system in steps as it goes along with a goal of 5% at poverty level, 10% for middle class, and 15% for business with all the loop holes gone and paper work gone that they have to have a lawyer work force for just to keep up with and doctors have to hire a team of people to just handle healthcare billing all because of trash ccalled lawmakers which have surely with out Question gone to American Schools for they are 100% Stupid

wpDiscuz