The release of a more detailed outline of what President Donald Trump and the White House have in mind for a tax overhaul has provided some new information but left many unanswered questions.
The lack of specifics in the unified framework released by the White House on Wednesday means that a great deal will be decided in committee when Congress works up its version of the plan.
What incomes are in each tax bracket?
That is going to be determined by committees on Capitol Hill. All that has been confirmed so far is that the current seven tax brackets would be reduced to three brackets, with the possibility of a fourth.
The three tax rates that were announced were 12, 25 and 35 percent.
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.
Would taxes on the middle class go up?
During an interview with ABC News chief anchor George Stephanopoulos on “Good Morning America” today, the president’s chief economic adviser, Gary Cohn, said that the tax plan “is purely aimed at middle-class families.”
While he gave one example of how a family of four earning $55,000 a year “can expect something in the neighborhood of 650 to 1,000 tax decrease,” he added that “every tax situation is different.”
Asked if he could guarantee that no middle-class family would get a tax increase, Cohn said, “There’s an exception to every rule.”
How would the government pay for the tax plan?
That remains unknown. Administration officials have suggested broadly that the economic growth spurred by corporate tax reductions would help offset the costs of those cuts, but no specifics have been released.
How much would the child tax credit increase?
Beyond saying “significantly,” the administration has not given any indication of how large the increase would be.
Right now, families with children under 17 get up to a $1,000 credit per child.
In addition to the amount of the credit, the administration is reportedly planning to increase the number of families eligible for the credit, though again it did not give specifics.
Under current law, the credit starts to phase out for single individuals making $75,000 annually and for married couples making $110,000.
The plan also includes a $500 tax credit for nonchild dependents, like elderly relatives.
How much would Trump benefit from this plan?
On “Good Morning America,” Cohn would not directly answer if the president would benefit, saying, “The wealthy are not getting a tax cut in our plan.”
However, there are other ways that wealthy individuals could benefit from the plan besides tax cuts. One significant example is the proposed elimination of the estate tax, which is levied on assets left to nonspouses after a person’s death. Individuals who amassed the wealth would not benefit from eliminating the tax because they are deceased, but their heirs would benefit.
On Wednesday, Trump told a crowd in Indiana that the plan is “not good for people like me.”
“We are eliminating most itemized deductions that primarily benefit the wealthiest taxpayers,” he said.