by Countable | 9.29.17
The 1040-EZ is the shortest version of the IRS’s Form 1040, meant to offer a fast and easy way for people to file income tax returns. Countable thought we’d EZ-fy the 9-page Trump/Republican tax reform proposal, the "Unified Framework For Fixing Our Broken Tax Code."
While the doc itself is short on details, here are the basics of what the tax frame would do:
collapse the current seven personal tax brackets to three: 12, 25 and 35 percent (this would cut the top individual income tax rate from 39.6 to 35 percent and raise the bottom tax rate from 10 to 12 percent)
nearly double the standard deduction to $24,000 for married families and $12,000 for individuals
eliminate "most itemized deductions" but retain mortgage and charitable deductions
retain – and simplify – tax incentives that "encourage work, higher education and retirement"
provide $500 credit for anyone taking care of a family member, regardless of age
"significantly" increase the Child Tax Credit
eliminate the estate tax (called the "death tax" in the document) — this is the tax families pay when a house worth over $5.49 million is passed down to an heir
eliminate the alternative-minimum tax (AMT) — this was created in the 1970s to prevent wealthy taxpayers from using loopholes to avoid paying taxes. Since its creation, it’s impacted an increasing number of taxpayers
simplify the tax code to where a "vast majority of Americans" could file their income taxes by “postcard” (down to one page)
the document also raises the possibility of a higher tax for the wealthy "to ensure that the reformed tax code is at least as progressive as the existing tax code and does not shift the tax burden from high-income to lower- and middle-income taxpayers"
lower the corporate rate from 35 to 20 percent
allow most small businesses to pay at the 25 percent rate, or, if they earned very little income, to potentially pay at the 12 percent rate. (Currently, many small business owners pay at their personal income tax rate, which could be as high as 39.6 percent.)
allow companies to write off investments in new equipment (and other capital) for at least five years
end the deduction for domestic production
"preserve business credits in two areas where tax incentives have proven to be effective in promoting policy goals important in the American economy: research and development, and low-income housing"
partially limit the deduction for net interest expenses
allow multinational corporations to exempt all dividends from foreign subsidiaries in order to "prevent companies from shifting profits to tax havens"
There is no mention of:
eliminating the carried interest tax benefits used by hedge fund managers
the Earned Income Tax Credit (EITC), which is used by the working poor to reduce the amount of taxes they owe and potentially provide them a refund
"This framework is focused on supporting American jobs, on making taxes fairer and on growing families' paychecks," Senate Majority Leader Mitch McConnell (R-KY) said in a statement.
"The idea that this plan would help average Americans instead of the wealthy and big corporations has been a hoax all along," said Frank Clemente, executive director of Americans for Tax Fairness. "This isn't 'tax reform,' it's just a big giveaway to millionaires and corporations, and it won't 'trickle down' to the rest of us."
How will the Unified Framework For Fixing Our Broken Tax Code affect you? Do you support the tax reform effort by Trump and GOP leaders? Or is it a "hoax"? Hit Take Action, tell your reps what you’d like to list or deduct, then comment below.
(Photo Credit: Mike Licht via Flickr/ Creative Commons)
Written by Countable
A man unwilling to release his own taxes hasn't proven his qualifications to rewrite ours. This is a solid NO until we see his taxes and proof that the rewrite of the tax code doesn't undermine the working capital required to keep the USA afloat without offering big business and potential foreign interests (like Russia) the opportunity to buy the country out from underneath us. No hostile takeovers through tax code changes.
Easy to rip us off. Let's talk about repealing the estate tax! Who does that benefit? Trump SHOW US YOUR TAXES! Until we see you last 10 years of full tax returns we will not vote on anything.
Take away itemized deductions my ass, I work on the road and most of my return is from deductions. 500 dollars to take care of a family member. From what I see this could be a disaster for middle class workers who own smaller businesses. Which use a lot of deductions at the yrs end. Try again DJT hasn't drained the swap, he is trying to flood it with dirty water
Any tax plan that fails to aggressively address income inequality in this country is not worthy of consideration. Corporations must pay a fair share with no "loopholes" in order to to achieve a budget that doesn't rely on continuing large deficits. I fear the present proposals will all fall short with respect to our country's debt.
Ravage the wealth of the United States and funnel it to rich people. Watch the deficit balloon, the economy collapse and blame it on the Democrats. We understand the plan.
Remove ALL personal income tax, federally, state and local for people making less than $200,000 annually. This would free up a lot of burden on people and businesses, as well as the IRS. Move ALL taxes to businesses, property and Religious entities and properties. This would allow the Free Market to demonstrate that it can provide and perform all of the needs of community and society. All IRS agents can now focus their efforts on business and clear out the corruption. Clear up the corrupt Non-profits and our deficit could be eliminated.
No tax reform until we see Trumps tax returns for the last 10 years.
I could support a lot of this.... we need to keep the estate tax and the top bracket at least until we can get out of deficits/debt. We should't be double-taxed, so keep the state and local tax deductions. a 15% drop in the Corporate tax rate is HUGE. Perhaps go to 25% instead - at least until we get out of deficits/debt. The pass-through rate seems low too, I'd like to see some analysis on if this will help investment, or just be a huge tax cut for the rich.
I’m sick of hearing what the GOP proposes for us tax wise, healthcare wise, this is despicable. We need to get bipartisan on this, apparently republicans want us poor and sick, this is repulsive.
Wait.. The poor are getting a tax increase? Ridiculous. I'm all for lowering the tax rate of everybody including the rich but not while increasing the tax rate of the poor.
As a retiree with Social Security and modest savings, this tax proposal would be devastating. I own my home of 25 years, but my taxes on that home have gone from under $1,000 to nearly $8,000 during that time. If I am not able to deduct my state tax, medical expenses and investment expenses on my little "portfolio" I will be paying thousands more in tax on my 5-figure income even with a doubling of the standard deduction. If those deductions are eliminated, the tax on Social Security income for people with incomes under $100,000 should also be eliminated to make sure we - the retired middle class who won't benefit from the alleged millions of new jobs - aren't paying for tax reductions for the rich.
Do not support this SCAM that Trump refers to as a tax plan! Same old stuff, tax cuts for the 1%ers and fewer tax breaks for the rest of us! Their wages continue to go up significantly each year while ours decline, or at best they may keep up with inflation!
Needs some fixing but the concept is there. Yes the tax rate for the lower class goes up 2% but their standard deduction increases by double and child/dependent deduction would increase as well, lowering their effective rate a little as compared to now. The corporate rate is a good balance as our current 35% is about 16% higher than most other advanced nations. Only real gripe here is the lowering of the top rate from ~39% to 35%. I'd keep it where it is. Also iron out the specifics on child/dependent deduction so families know exactly by how much their taxes will decrease. Obviously, these Congressmen released just the rough outline to build a specific bill that will come months down the road, but criticism is still valid at all stages.
Soooo....if I'm reading this right the raising taxes from 10% to 12% on the lowest earners then lowering the rate from 39.6 to 35% on the wealthiest. Makes great sense. Then they haven't decided about your tax deductions. Yes as a single person I'll be getting &12,000. But as a person that lives from small rental income and Social Security Will I still be able to take off improvements in my property, or depreciate my property over 25 years. Nothing said about dependants aside from a $500 deduction for taking care of a defendant of any age. Best part is if you leave an estate over 549 mill no taxes. Nothing like insuring your already rich kids get a little help from Uncle Sam. While most folks whose kids go to college are being squashed by student debt and the interest attached. Well who knows maybe when it is fleshed out it will work to the benefit of the 99%. So far from this administration it has only squandered tax money to fly in private jets, play golf and tweet like a spoiled teen that believes he knows it all.
Those Republican rascals would not get another cent of contribution from the handful of super rich donors who own them now, if they do not remove all estate taxes. The estate tax is a targeted benefit to an incredibly small number of highly influential Republican donors.
No change in taxes until Trump releases his own taxes.
Keep the tax rate high on wealthy individuals and families. Families earning more than $400,000 should pay the highest possible rate. Make tax rate progressive! Lower tax rates on middle class and working poor! They are the most likely to spend the money and kickstart the economy! Consider making up for lost revenue by taxing carbon emissions to deal with climate change, and incentivize the use of renewable energy.
The GOP's tax "reform" bill is a huge tax break for corporations and the wealthy while leaving the poor and lower economic classes to pick up the slack. Lowering the corporate rate from 35 to 20 percent will hurt the economy. Trick-down-economics is the biggest fraud! Do not support this!
Cutting higher bracket and increasing lower. How about the opposite. Let us I. The lower brackets keep more of our money and increase the higher bracket. No on that.
I support tax reform but there are parts in this that I do not support. Unless the entire tax system is eliminated and replaced with a fixed rate with no exemptions other than healthcare costs and taxes payed to other jurisdictions I would request you as my representative make sure that property taxes and other taxes payed to other agencies be deductible at full value remain otherwise this will become counterproductive and result in little or no income tax relief.