Report: New GOP tax reform could increase average household income by $4,000 annually
According to recent study by President Trump’s Council of Economic Advisers, the GOP tax reform framework could increase household incomes for American families by thousands of dollars. The framework proposes cutting the corporate tax rate from 35 percent to 20 percent and reducing the number of tax brackets in the individual tax code from seven to three, which experts project would increase the take-home pay of hard-working Americans.
“Reducing the statutory federal corporate tax rate from 35 [percent] to 20 percent would … increase average household income in the United States by, very conservatively, $4,000 annually,” says the report from the advisory agency within the Executive Office of the President.
“The main reason that wages increase is that the lower tax rate reduces the total cost of a firm that’s investing in a capital asset, like a machine, here in the U.S., and more assets like machines let workers produce more,” Kevin Hassett, chairman of the Council of Economic Advisers, said in comments released Monday. “And when workers can produce more, businesses can afford to pay their workers more.”
The GOP tax framework presented Sept. 27 by House Speaker Paul Ryan, Senate Majority Leader Mitch McConnell, and other GOP leaders seeks to significantly simplify the tax code.
It calls for roughly doubling taxpayers’ standard deduction (an individual’s first $12,000 of income would become tax-free, as would the first $24,000 for married couples) and for condensing the current seven tax brackets to three.
Depending on their income, individual taxpayers currently are taxed at one of these percentages: 10, 15, 25, 28, 33, 35, or 39.6 percent. The three brackets in the Republicans’ proposed framework are 12 percent, 25 percent, and 35 percent.
It has been more than 30 years since Congress overhauled the tax code and America needs a code that is simpler, flatter and fairer NOW! Our current tax code is cumbersome and confusing and Americans are suffering! Click here to support President Trump’s fundamental tax reform that incentivizes growth and increases take-home pay!