GOP tax plan: The estate tax may soon disappear

GOP tax plan: The estate tax may soon disappear

US President Donald Trump has promised "historic tax relief to the American people" as he tries to build momentum behind his plan to overhaul the country's tax laws and revive his struggling legislative agenda in Congress.

President Donald Trump and top Republicans will promise a package of sweeping tax cuts for companies and individuals, people briefed on the planning said, but the GOP leaders will stop short of labeling numerous tax breaks they hope to strip away, putting off controversial decisions that threaten to sink the party's tax effort.

The tax principles are being released by the so-called Big Six, consisting of House Speaker Paul Ryan, Senate Majority Leader Mitch McConnell, Treasury Secretary Steven Mnuchin, National Economic Council Director Gary Cohn, Senate Finance Committee Chairman Orrin Hatch and House Ways and Means Committee Chairman Kevin Brady. "It's been languishing for so long, 36 years since we've had tax reform, and it's hurting our economy".

NY congressional Republicans had pleaded with Trump to retain the tax break over concerns it would hit New Yorkers hard and amount to an unfair double tax.

-Businesses whose income "passes through" to owners (the model for about 95 percent of all businesses) would be subject to a new tax rate of 25 percent, as opposed to the higher individual rate now assessed.

At the core of the GOP plan: slashing both corporate and individual tax rates.

Republican senators on opposing sides of the deficit debate have tentatively agreed on a plan for $1.5 trillion in tax cuts.

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Tax brackets on income taxes would be collapsed to just three, at 12%, 25% and 35% for the most wealthy citizens.

While wealthy taxpayers would see a decrease in their tax rate, many also stand to benefit from eliminating the estate tax and the alternative-minimum tax.

Additionally, the proposal doubles the standard deduction that most Americans take ($12,000 for a single person and $24,000 for a married couple).

"We are determined to make smart investments in job creation programs and community colleges, make child care and education more affordable and strengthen retirement security for all Americans", he said. It's also expected to cut the corporate rate to 20% - not as much as Trump's desired 15%, but still a step in the right direction.

But economists and tax experts disagreed. Donnelly has said he thinks tax reform should benefit the middle class, but he has not said yet if he would support Trump's proposed plan. Trump's notion that economic growth will pay for most of it is fantasy, and Democrats are not going to sacrifice popular tax deductions such as those for mortgage interest and charitable donations to help pay for tax cuts for the rich. "It has been 31 years since we last got this done, and hardworking families and small businesses can not afford to wait any longer".

Despite fierce opposition from high-tax states when the idea was first floated, the Trump administration is pushing ahead with the repeal, which would remove state and local income and property taxes as deductions on federal returns.

"The deduction for state and local taxes matters for all Americans, but it affects NY disproportionately", the letter said. A new pass-through rate of 25 percent is created to help people who own their own businesses.