Over the last week, President Donald Trump and his team have been zeroing in on getting their tax reform plan together, and this may offer some big tax cuts for a few groups of people. Throughout his campaign, President Trump made it clear that he wants the tax code simplified and wants to help Americans keep more of their money in their pocket, especially the middle class and business owners. Here’s how he and Secretary of the Treasury Steve Mnuchin have preliminary said they’d like to get that done.
What It Looks Like
Rather than the current system we have, President Trump has released that he’d like there to only be three tax brackets. The basics would look like this:
The income buckets are more wide-ranging in this plan, as this is designed to help the middle class get back on its feet following the recession. According to the Tax Foundation, this plan will reduce taxes 0.8 percent on average for most taxpayers. Depending on your income this may be more or less. However, the biggest proposed cuts will come to the business owner and corporations.
How it Benefits Corporations
President Trump has committed to helping businesses thrive in an effort to make the American economy a powerhouse again. This starts with helping corporations free up money to hire more workers. Under his proposed tax plan, Trump is looking to cut the corporate tax rates from 15 to 35 percent. While the exact percentage is up for debate, it’s largely believed that both parties are generally in favor the part of his tax plan. Not only will this help American businesses domestically, but will also enable them to be more competitive abroad.
Other Business Owners
If you don’t own a big corporation, that’s OK because Trump’s tax plan will also aim to alleviate some of your tax burden. The Tax Policy Center explained that Trump has proposed a maximum rate of 15 percent on business income. However the House Ways and Means Committee has a slightly different plan of a 25 percent maximum. Either way, business owners will almost certainly feel some kind of tax relief and feel more freed up to bring in a higher profit or create more jobs.