In a speech given in Springfield, Missouri last week, President Donald Trump announced his plans to majorly reform the tax code. So, what is his plan, and what are its proposed benefits?
First, let’s look at the details of Trump’s proposed tax changes. The exact outlines of these changes are not available, as the full plan has not been finished. This final plan is still being written and will be a collaboration between GOP congressional leaders and the White House, including President Trump. But Trump recently spoke in Missouri and gave a broad summary of his tax code plan, which would include the following: simplifying the tax code, creating a more competitive tax code, delivering tax relief for the middle class, and repatriating offshore profits. These proposals may or may not be in addition to White House tax plans announced in April, which had included changing the number of tax brackets from seven to three, bringing the corporate tax rate down to 15%, and setting the income tax brackets at 10%, 25%, and 35%.
In his speech in Missouri, Trump said, “The foundation of our job creation agenda is to fundamentally reform our tax code for the first time in more than 30 years,” and said that this overhaul of the tax code would benefit lower- and middle-class Americans. Critics of the proposed cuts disagree with who would benefit from the plan, like Democratic National Committee Chairman Tom Perez who said that the proposals would “overwhelming benefit the super-rich and corporations over hard-working Americans.”
It is difficult to get a full gauge of what the effects of the new tax plan will be until the plan is fully finished. Treasury Secretary Steven Mnuchin, one of the White House staffers working on the tax plan, said that he hopes to get the finished plan to the President’s desk by the end of the year. So, if all goes according to schedule, there should be a Republican tax plan before 2018.
Tax code changes affect all Americans, especially major ones like the ones outlined in President Trump’s speech. Trump is expected to make this tax reform a major issue of his presidency and is also expected to spend time pitching his plan to the public. So we’re sure to hear much more about this exciting tax reform in the coming months.
At Vanguard, it’s our job to stay on top of developments in tax law, especially when they relate to tax relief. Our tax experts are dedicated to knowing every word of tax law so that they can offer our clients expert knowledge and the best tax relief. We’ll keep a close eye on the evolving tax plan and continue to provide our clients with the best possible tax defense.