Republican’s Congressional Tax Reform Effects:

The information below came from others review and interpretation of the current suggested income tax changes being considered. Interesting . . . some good but too much bad!
1) Yesterday, the House Ways and Means Committee released its initial tax plan which proposes several changes to current tax laws. We want to caution that this is an initial proposal and many changes may be made through negotiations in Congress. We would not suggest any action at this time due to uncertainty over what a final plan will look like, but wanted to pass along the initial details that are being proposed.
• Reduce tax brackets from seven to four. A summary of the now proposed brackets are below:
Income Tax Rate Income Levels
Current Tax Act Single Married-Joint
10 - 15% 12% $0-$44,999 $0-$89,999
25 - 28% 25% $45,000-$199,999 $90,000-$259,999
28 - 39.6% 35% $200,000-$499,999 $260,000-$999,999
39.60% 39.60% $500,000+ $1M+
• Eliminates itemized deductions except for charitable contributions, mortgage interest, property taxes, and retirement savings. Allows the mortgage deduction for new mortgages of $500,000 or less.
• Eliminates deduction for state and local taxes
• State property tax deduction limited to $10,000
• Doubles the standard deduction from $6,300 to $12,000
• Doubles the estate tax deduction from $5.49M to $11M, with the estate tax being phased out in six years
• Eliminates the Alternative Minimum Tax (AMT)
• Increase child tax credit from $1,000 to $1,600
• Lowers corporate tax rates from 35% to 20%
Again, this is an initial proposal and details may change significantly. We will continue to monitor the situation and communicate updates as they are reported. If you have any questions, please let us know.
2) This list has some important differences from one I saw that was explained in detail yesterday. This one doesn’t show important deductions we now have that will be eliminated. As an example, it doesn’t show that we will no longer be allowed deductions for medical expenses, that those paying student loans will no longer be allowed deductions. For those of us living in states that have taxes on incomes, the Federal now allows us a deduction for that. That deduction will also be eliminated. Wish I could remember the other deductions being phased out......all of which would adversely affect lower and middle class folks.

However.............notice the Estate Tax being phased out, and from the way it was explained yesterday, this will benefit the very wealthy. Same with the corporate taxes being LOWERED.

The assessment is that the middle and lower class will be helping to pay for the high income bracket to get even more tax breaks.

Although the paragraph below talks about negotiations, it appears that this Republican congress is trying to rush the bill through, just as they did with the Health Care Bill.

There were no Democrats allowed to be part of the framing of this latest tax reform bill.

3) http://www.msnbc.com/msnbc-news/watch/gop-tax-reform-plan-breaking-down-its-biggest-goals-1056128067761

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