Bill would reduce number of tax brackets for individuals, reduce corporate taxes
Republican lawmakers in the House of Representatives on Thursday released details of their plan to overhaul the country’s tax system, framing it as a way to provide relief for middle-class families.
The bill was co-sponsored by House Speaker Paul Ryan and congressman Kevin Brady, who chairs the House Ways and Means Committee.
Brady said the bill would result in a $1,182 annual tax cut for a middle-income family of four that earned $59,000 per year, the median household income. The legislation would also reduce the number of tax brackets from seven to four.
The White House previously said an average household would save $4,000.
“For families, we’re lowering rates, eliminating costly deductions that drive up taxes, and significantly increasing the standard deduction to protect more of each paycheck from taxes,” Brady said in a statement. “We’re boosting family-focused tax benefits like the Child Tax Credit to help families keep up with the rising costs of child care, higher education, and looking after their loved ones.”
Brady said the bill has the complete support of President Donald Trump.
“Our legislation also delivers unprecedented simplicity that will make it easier and more affordable for families across our country to file their taxes each April,” he said. “For the first time in history, 9 out of 10 of Americans will be able to file their taxes on a form as simple as a postcard.”
The bill, more than 400 pages long, provides details of many promises made by Trump since he took office in January, like reducing the number of tax brackets and phasing out the estate tax. Trump said he wants Republican lawmakers to keep the momentum up for the bill, the largest overhaul of the U.S. tax code since the 1980s, because he wants to sign the legislation by Thanksgiving at the end of the month.
“We are just getting started, and there is much work left to do,” Trump said in a statement. “The special interests will distort the facts, the lobbyists will try to save their special deals, and some in the media will unfairly report on our efforts. But my Administration will work tirelessly to make good on our promise to the working people who built our Nation and deliver historic tax cuts and reforms -- the rocket fuel our economy needs to soar higher than ever before.”
Critics, including many Democrats, say the biggest beneficiaries of the plan are actually corporations and billionaires, not the middle class. The tax rate for the highest-earning corporations, for example, would be immediately reduced from 35 percent to 20 percent.
Shortly after the bill was announced, Senators Elizabeth Warren and Bernie Sanders released a video response criticizing the proposed corporate tax cuts.
"Republicans are planning to rain about $2 trillion in tax giveaways down on giant corporations," Warren said. “We're talking, once again, about a system that's been rigged right here in Washington, rigged so that the richest, thinnest slice at the top gets more and more, and they kick dirt in everybody else's face,” she added.