The party leader of US Republicans has presented a first proposal to leading members of tax reform promised by President Donald Trump to relieve corporations and citizens. The heart of reform is reduction of corporate tax, which is designed to significantly reduce burden on US operations and make m more competitive internationally. The Democrats accuse Trump of using his plans to favor wealthy and business.
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The maximum tax rate for companies is expected to fall from 35 to 20 per cent. For households, four tax classes will be held in future – 12, 25, 36 and 39.5 percent. The maximum rate has been received – probably in order to avoid accusation of relieving rich. However, with planned tax reform, it is only valid for a year’s income of one million dollars and not as of currently $470,000. The company tax is expected to fall from 35 to 20 percent as required by Trump. Inheritance taxes for millions of expensive properties are to be disappearing. This reduces tax revenue.
Trump must now take back a part of his electoral promises. In election campaign, he had promoted a reduction in corporate tax to 15 percent and a discharge for households of an average of 4,000 dollars annually. In his opinion on planned tax reform, President was confident. “This is anor step in way of giving massive tax relief to American people,” he said.
The draft must be passed to Senate as well as House of Representatives – re are significant changes expected. Experts particularly expect major problems in question of counterfinancing. According to an estimate of party-independent think tank tax Policy Center, project would bring federal budget in first decade of revenue of 2.4 trillion dollars. The experts do not expect gigantic revenue shortfalls to be compensated for by greater growth, higher wages and thus again higher tax revenues – as Trump and its allies hope. Among or things, International Monetary Fund had warned that such plans were very rare in history.
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The House of Deputies wants to vote on proposal by 23 November. Subsequently, tax reform goes to Senate, where Republicans only have a narrow majority of two seats. Trump had announced to want to sign law until Christmas. However, critics think that this is too short a timetable.
In addition to companies, US citizens are also to be relieved of tax by reform. Even after reform, citizens with middle-income should be able to continue to pay certain sums for ir retirement. On or hand, possibility of reducing mortgage rates from tax should be reduced. At same time, possibility to tax local property taxes from federal government is to be limited to 10,000 dollars. Income taxes from individual US states should no longer be deposed. However, se depreciation options are very popular in USA and are likely to find many defenders among Republicans as well.
The Republicans also want reform to close some loopholes in US tax law and thus promote a more efficient US economy. The model is intended to relieve a four-member family with an average income of nearly $60,000 per year with 1,182 dollars, said chairman of House of Representatives, Paul Ryan. The system should also be simplified considerably. According to Ryan, tax return will fit on a postcard in future.
