President Donald Trump proposed to cut taxes for all Americans. The current seven tax brackets will be cut down to three brackets but it is really four brackets because low income Americans will pay a tax rate of Zero. It is unknown how much income is considered “low income” as of yet. Married joint filers earning less than $75,000 will pay 12%. Married joint filers earning more than $75,000 to $225,000 will pay 25%. Married joint filers earning more than $225,000 will pay 33%. Tax brackets for single filers are half of these dollar amounts.
Capital Gains Tax will be 20% for the maximum rate. Carried interest will be taxed as ordinary income.
Standard Deduction will be $30,000 for joint filers and $15,000 for single filers. Personal exemptions and Head of Household filing status will be eliminated. Itemized Deductions will be capped at $200,000 for joint filers and $100,000 for single filers.
There will be no Estate Tax but capital gains held until death and valued over $10MM will be subject to an unknown tax rate.
All Businesses will be taxed at 15%. Corporate profits held offshore that are brought back to the United States will be taxed at 10%.
The tax plan is expected to be in effect January 2017.