On September 27, 2017, Speaker of the House Paul Ryan announced some breaking news on tax reform in the United States. The following is a message from Paul Ryan, detailing the proposed plan:
“Today is a big day. Today, the House, the Senate, and the Trump administration unified behind a concrete framework for tax reform.
This is the first step forward to fixing our broken tax code—which hasn’t been done in over thirty years.
We are cutting taxes. And we want you to have more jobs, fairer taxes, and bigger paychecks.
I want to personally send you the full framework.
You will hear a lot about our plan, but these are the facts:
- Lowers Rates for Individuals and Families
The framework shrinks the current seven tax brackets into three – 12%, 25% and 35% – with the potential for an additional top rate for the highest-income taxpayers to ensure that the wealthy do not contribute a lower share of taxes paid than they do today.
- Doubles the Standard Deduction and Enhances the Child Tax Credit
The framework roughly doubles the standard deduction so that typical middle-class families will keep more of their paycheck.
In combination, these changes simplify tax filing and effectively create a larger “zero tax bracket” by eliminating taxes on the first $24,000 of income earned by a married couple and $12,000 earned by a single individual.
It also significantly increases the Child Tax Credit.
- Creates a New Lower Tax Rate and Structure for Small Businesses
In Wisconsin approximately 9 out of 10 businesses file their taxes as individuals. These small businesses and their employees are the backbone of our economy. That’s why the framework limits the maximum tax rate for small and family-owned businesses to 25% – significantly lower than the top rate that these businesses pay today.
This is a once in a generation moment. We can fix our broken tax code and put Americans first.”