Tax Reform and Likely Estate Tax Repeal proposed today by the Trump Administration
Tax relief for middle-income families and provisions aimed at helping people with childcare costs.
The current seven individual income tax brackets would be collapsed into three. (Journalists at Bloomberg and Fox News are reporting that the rates will be 10 percent, 25 percent and 35 percent, which are slightly different from the rates in Trump's campaign plan and the House Republican blueprint.)
The corporate tax rate would be reduced to 15 percent, and small businesses would also be eligible for this rate. (Mnuchin confirmed this provision at an event hosted by The Hill Wednesday morning.)
The alternative minimum tax, the estate tax and ObamaCare's 3.8 percent surtax on net investment income for high earners would all be eliminated.
All itemized deductions except those for mortgage interest and charitable contributions would be eliminated. Other tax preferences would also be repealed.
The U.S. would move to a "territorial" tax system that does not tax U.S. corporations' foreign earnings. Companies' earnings that are currently held abroad would face a onetime tax.
The concept of estate tax repeal is a controversial topic which has garnered fervent supporters and detractors. The tax was temporarily suspended in 2010 (the "Throw Momma from the Train" year), but reinacted in 2011. Current federal estate tax exemptions are set at $5.49 million per individual, with a 40% rate. In addition, some states (such as Illinois, with a $4 million exemption per individual) impose an additional level of estate taxes, in addition to federal estate taxes.