After the President trump previously announced the tax plan now the GOP has come up with much-awaited tax plan outlines. This plan is a considerable change in the lives of the high net worth individuals. The tax plan is the most significant part of all of us lives, so we have to know the salient features to understand what is going on in the economic as well as political forefront.
In this piece, we are going to have a glance at the highlights of the tax plan.
Switching to the three tax brackets:
From the twelve bracket plan of trump, the GOP is most likely to switch to the three bracket plan. The brackets will comprise of 12, 25 and 35 percent. Furthermore keeping in view the requirement to have a bracket for the highest earners the top 39.6 percent bracket will also remain intact.
Alternative minimum tax:
One of the most annoying tax in the history of United States is the alternative minimum tax. This tax is nothing but an additional cost of bookkeeping so when the GOP decided to get rid of this. The trump suggestion is also similar.
A dramatic decrease in the corporate tax:
So here comes the most significant revelation the GOP suggested the corporate tax to be lowered to 20 percent rather than the present 35 percent.
Capping of pass tax:
One of the main advantage associated with this capping is that now the clients have the freedom to not only break their income in the pass-through portion but also to take advantage of the low tax rate i-e just 25 percent.
The next significant highlight of the GOP tax plan is the increment in the standard deduction and elimination of the various special interest deductions. Now this considerable step will further simplify the things for the Americans so that they find ease and convenience in filing the taxes. The GOP suggests increasing the fee from $6,350 to $12,000 for singles and for couples the tax would be $12,700 to $24,000.
Stability of charitable deduction:
The house pays the much need attention the concerns of the investors regarding the elimination of charitable deduction. However, the tax plan states explicitly that retention of the charitable deduction.
Repeal of death tax:
The tax plan also provides a relief from the death tax. But here the question is how it manages to do that? Well, only by merely increasing the exemptions and repealing the tax after several years.
The current exemption is already sky high, so when the GOP plans to increase the limit, then it will only hit the largest yet most poorly planned estates. We have been calling death tax, a death tax but it is nothing but an estate tax.
The tax plan may seem as bit drifted away from the president plan still akin to the president’s one. So even though it’s a bare fact that it is going to change the things nevertheless, it does give us the idea that what the Republicans are planning to put forward.