Lawmakers will face a fight to eliminate US$4 trillion in tax deductions, loopholes and other "base broadeners", including tax breaks that will be defended by interest groups and lobbyists.
Tax experts feel that although India already has only 3 tax slabs system as 5%, 20% and 30%, but considering the levels of income to which these slab applies, there is great scope for further reduction in these tax rate, specially for 2nd and 3rd slab.
For small businesses, the tax rate on the profits of pass-through businesses would be capped at 25 percent.
On "Meet the Press", Chuck Todd said the administration would be like "Houdini" if it could not raise the deficit while cutting taxes for everyone except the wealthy, despite the fact that the plan would cut taxes extensively for the wealthy. It would also lower federal revenues by $6.2 trillion over the first 10 years. Their after-tax incomes would rise by about $130,000 an average, or 8.5%. Their after-tax income would jump 10%. "It more than pays for a tax cut".
Cohn said that taxes may not decline for some, "maybe one person", but insisted that the middle class would benefit. They are the basis for the argument for "tax reform" deployed by the president of the United States, his treasury secretary, and his chief economic adviser.
"This much is clear: A couple falling well within the middle class by downstate standards-people, in most cases, living paycheck-to-paycheck in modest suburban homes-will realize much smaller savings than their counterparts in lower-cost, lower-taxed states across the country", he wrote.
"We believe that people should pay taxes once and not twice", Mnuchin replied.
President Trump has been touting tax "reform" since the early days of the primary campaign.
Trump has also pledged repeatedly that the plan would reduce the taxes paid by middle-class families, but he has not provided enough details to evaluate that claim.
Congressional committees will be allowed to add a fourth rate above 35 percent if they choose, but that decision and the determination of income ranges for the different brackets will be made later.
Families with children, though, could get hurt under this plan. They also want to double the standard deduction so that more income is taxed at zero percent.
The plan repeals the individual AMT that exists under current law. "The more brackets you have on an income tax the more spread out it is over income", said Jon Whiten of liberal think tank New Jersey Policy Perspective. But the plan also could end up serving another goal: revenge on Never Trumpers.
One potential offset - the elimination of a deduction for state and local income taxes - is subject to negotiation, National Economic Council director Gary Cohn said on Bloomberg Television on Friday.
The tax legislation can advance only after House and Senate passage of the budget blueprint.
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