Congressional Republicans unveiled their long-awaited tax bill Thursday that proposes the most drastic overhaul of the tax code since former President Ronald Reagan. The plan includes a $1.51 trillion tax cut for corporations, and the GOP says the bill would reduce taxes for some middle-class families.
The plan establishes four tax brackets, 12, 25 and 35 percent, while maintaining a 39.6 percent top-rate tax for the highest-earners. The income levels for those brackets have not yet been disclosed, The New York Times reported.
The plan would also slash the corporate rate from 35 percent to 20 percent and keep the 401(k) retirement savings plans. The bill would slash the alternative minimum tax. The bill also preserves the estate tax, although it exempts some assets and would be repealed after six years. The GOP plan would also increase the child tax credit to $1,600
The legislation would eliminate deductions for state and local income taxes and cap property tax deductions at $10,000. Republican members on the Hill indicated Thursday they were not satisfied with this provision in the bill.
“I’m still analyzing it, but right now, I’m strongly leaning no,” Rep. Pete King of New York said, according to the Hill.
Congress has not succeeded on comprehensive tax reform since 1986, when Reagan was in the White House and Democrats controlled the House.
“This isn’t the last product,” Rep. Carlos Curbelo, a member of the House Ways and Means Committee, said, according to the Times. “This is just the kickoff to this tax reform exercise.”
Trump and the GOP have set a bold timetable for the legislation, hoping to get it on the president's desk by Christmas. Republicans have 10 days to hash out any details before coming to a vote in Congress.
Democrats repeatedly warned that the legislation would tilt favorably to corporations and the upper class and that it would fail to live up to Trump’s campaign promises of relieving the ever-dissolving middle class.
Ironically, U.S. stocks slipped in late morning trading on Thursday, Reuters reported, as investors began to research a summary of the Republican tax bill that called for a massive overhaul of the tax code.
“The idea of this plan getting approved is still a long shot,” Phil Blancato, CEO of Ladenburg Thalmann Asset Management in New York, said, Reuters reported.
“I don’t think the market or most economists think they can get this done. There’s just not enough consensus in the House to move this forward.”
Trump proposed calling the bill "The Cut Cut Cut Taxes Act," but it appears he did not get his way. A summary of the bill Thursday suggested the name of the bill is simply "The Tax Cuts and Jobs Act."