The proposal would limit the maximum tax rate to 25% for income of small and family-owned businesses that are sole proprietorships, partnerships and S corporations.
The loss of the personal exemption, which now shields $4,050 of income from federal taxes for every household member, also played a major role in increasing taxes for some households - an effect that would get worse over time, because the amount of the personal exemption keeps pace with inflation.
Critics and fans are still trying to sort out the winners and losers, a task made hard by the fact that so much of the substance is still to be written, and nobody can guess what Congress will do.
A crucial component of the Republican argument on taxes is that increased prosperity for already-wealthy Americans will eventually spread to everyone.
The deduction only benefits people who itemize on their federal tax returns.
Another lie being told by Trump and the Republican leaders in Congress is that even though they're raising the marginal tax rate on the poor from 10% to 12% (while cutting rates for everyone else), the poor will pay lower taxes because the standard deduction is being doubled.
According to the Organization for Economic Cooperation and Development, corporate taxes are the most economically harmful form of tax, a likely reason why so many countries have lowered them in recent decades.
"You can not look at a tax package individual part, by individual part".
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Ending the estate tax would "protect millions of small businesses and the American farmer".
The corporate rate, as expected, will dip to 20%, down from 35%.
The proposed new 20 percent corporate tax rate would mean a raise for hardworking working Americans.
Multiplying the amount of small business and farm-based estate taxpayers who are living today by deaths over the next 70 years would still just result in 5,600 small businesses or farms potentially relieved of the tax - vastly smaller than Trump's "millions". Roughly 95% of USA businesses, from small businesses to massive hedge funds, are subject to pass-through taxation. Trump's plan would end the USA practice of taxing the foreign profits of US -based corporations. The analysis compares what his tax burden would be under current law with what it would be under the proposal.
The almost $6 trillion plan sketched out this week by Trump and other officials would deeply reduce taxes for corporations, simplify tax brackets and almost double the standard deduction used by most tax filers.
Lower-income households might see a modest gain from the increase in the standard deduction to $24,000 (for couples).
"This huge tax cut will be the rocket fuel for our economy", Trump said.
Asked about the White House's pledge that the rate cuts in its plan would benefit the middle class, Eric Toder, codirector of the Tax Policy Center, said: "The short answer is, we don't agree with them".
-The national debt. Trump's plan doesn't include enough details to precisely project its impact on the government's finances. There's also a reduced rate for family or individual businesses, such as Donald Trump's. Under his administration, he said, "the era of economic surrender is over". However, many experts say the administration's projections for economic growth are unrealistic. They also sometimes argue that the deduction subsidizes wealthy taxpayers in high-tax states at the expense of lower-income taxpayers in low-tax states.