Republican’s have faced a challenge in the past few weeks, trying to pass their tax bill through the various layers of government. Their current proposal would supposedly lower taxes on businesses as well as individual households, but there still remains several issues with the plan as a whole.
The framework for the bill has the hopes of lowering the current 35% corporate tax rate to round 20%. The bill would also lower the rate for businesses that identify as “pass-through” businesses to 25%.
The current seven tax brackets that are in place would be changed to just three. Those new numbers are 12, 25 and 35 percent, which would almost double the standard deduction. The tax credit for children would also be substantially increased but no knowledge has been released as to how much.
The more broad issues were spoken about over the course of several months during negotiations between Treasury Secretary Steven Mnuchin, National Economic Director Gay Cohn and top Republicans in the House and Senate, a group that is now being called the “Big Six.” The attempts to put in place new tax laws has been frustrating for both parties as neither can agree on a solution.
Paul Ryan, the House Speaker stated that “tax reform is the most important thing we can do to restore confidence to this country, to get jobs and prosperity and that’s why we are so singularly focused on getting this done this year.” Paul Ryan is considered to be one of the Big Six members.
There are still several roadblocks in the way of approving any tax bill and the main one is that the plan has yet to show the details of how it will be paid for. Some analysts have stated that it will cost the U.S. trillions of dollars.
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Senate Majority Leader Mitch McConnell stated that “this framework is focused on supporting American jobs, on making taxes fairer and on growing families’ paychecks.”