The Republicans of the House of Representatives today presented the details of the tax reform promoted by President Donald Trump and that seeks to lower the tax rate of companies from 35% to 20%, in addition to reducing to four tax brackets of individual income .
The document with the principles of the bill of fiscal reform was finally published by the Committee of Ways and Means of the Lower House, after numerous delays and internal debates before the differences within the republican party.
It contains the proposal, already outlined in September by the White House, to set a reduction in the tax rate to companies from the current 35% to 20%.
Regarding the simplification of the individual income tax brackets, the plan contemplates moving from the current seven to four: 12%, 25%, 35% and 39.6%.
That current rate of 39.6% paid by the highest income in the US has been decided to keep up with the criticism of the initial proposal, which suppressed it and led the Democrats to denounce that the Republicans and Trump sought to lower taxes on the More rich.
On the other hand, the project of the Republicans of the Lower House increases the value of tax deductions per child (from 1,000 to 1,600 dollars), as Ivanka Trump, daughter and adviser to the president, and one of the greatest defenders of the need for an increase.
Although they had considered it, Republicans have finally decided not to include in their plan limits on the amount of money that taxpayers can allocate without paying taxes to their retirement plan, known as 401 (k).
The proposal does include the controversial suppression of local and state tax deductions, and halves (from the current million to $ 500,000) the cap on a popular mortgage interest deduction to which millions of homeowners are welcome.
Although Republicans agree on the tax cuts, the main stumbling block is that Trump’s plan implies an increase in the $ 1.5 trillion budget deficit over the next decade, and many of them oppose any increase in the budget. federal indebtedness.
This Tuesday, Trump said he wants his tax reform plan ready to be signed at Christmas or even earlier, in an act he said will be “the largest fiscal event in the history” of the country.
The president’s goal is for the lower house to approve the draft tax reform bill at the end of November, around the Thanksgiving holiday, so that the Senate has about a month to do the same before Christmas.