Today, the Trump Administration, the House Committee on Ways and Means, and the Senate Committee on Finance released a long-awaited tax proposal, titled the Unified Framework for Fixing Our Broken Tax Code. The United Framework proposes to:
• Reduce the number of tax brackets from seven to three, with rates of 12%, 25%, and 35%, without specifying where the brackets start and end;
• Almost doubling the standard deduction from its current amount to $24,000 for married taxpayers filing jointly and $12,000 for single filers;
• Repeal personal exemptions for dependents and, to offset the repeal, increase the child tax credit to an unspecified amount and increase the income levels at which the child tax credit begins to phase out;
• Expand the child tax credit concept to give a $500 credit to anyone caring for a family member who isn’t a child, regardless of age;
• Repeal the individual alternative minimum tax; • Eliminate most itemized deductions (including deductions for state and local income taxes), but retain tax incentives for home mortgage interest and charitable contributions;
• Repeal the estate and generation-skipping transfer taxes (without mention of the gift tax);
• Eliminate the deduction for state and local taxes.