- Lower 15% corporate tax rate
Trump’s tax plan calls for slashing the federal income-tax rate to 15% for corporations, small businesses and partnerships of all sizes. It also imposes a one-time tax on about $2.6 trillion in earnings that US companies have tax sheltered overseas.
- Reduction of personal tax brackets from 7 to 3
The plan proposes condensing the existing seven income-tax rates to just three, cutting the individual top rate to 35% from 39.6%. The lowest rate would remain at 10% and the middle rate would be 25%.
- Doubling of standard deduction
The plan would double the standard deduction, meaning the deduction for a married couple filing jointly will jump to about $25,000 and to $12,700 for single people. But all other deductions, except for mortgage interest and charitable contributions, would be eliminated.
- Elimination of deduction for state and local taxes
The plan would eliminate the federal income-tax deduction allowed for state and local taxes — a provision that would hit high earners in high-tax states, including New York and New Jersey.
- Elimination of death tax
The plan would repeal the estate tax entirely. Under current law for 2017, the estate and gift-tax exemption is $5.49 million per individual.
- Lower capital gains tax
The plan would drop the top federal capital gains rate to 20%, from 23.8%, to be achieved by eliminating a 3.8% tax that is used to fund the Affordable Care Act.
- Elimination of AMT
The plan would repeal of the so-called alternative minimum tax. AMT was created about 50 years ago to ensure that wealthy Americans earning above a certain amount pay a flat minimum tax rate. Since the 1970s, the number of people subject to AMT has grown dramatically.
