Republicans in the U.S. House of Representatives are due to release tax legislation on Thursday calling for slashing taxes on corporations, repealing some taxes paid primarily by the wealthy and adjusting other taxes on families and individuals.
As questions about the final shape of the bill swirl around Washington, the following is a look at the basic features of the plan released in September, though changes are expected:
» Reduce the U.S. corporate income tax rate to 20 per cent from a current statutory 35 per cent.
» Eliminate the corporate alternative minimum tax.
» Move to a territorial tax system that no longer imposes the U.S. corporate tax on foreign profits of U.S. companies.
» Require U.S. corporations to return assets held overseas at lowered one-time tax rates.
» Establish a minimum global tax aimed at the overseas profits of U.S. corporations to prevent tax base erosion.
» Limit the maximum tax rate on small businesses and other non-corporate enterprises to 25 per cent, down from the present maximum rate on "pass-through" income of 39.6 per cent.
» Allow immediate and full expensing of capital investments for at least five years.
» Partially limit the business tax deduction for debt interest payments.
» Cut the top individual rate to 35 per cent from 39.6 per cent.
» Increase the standard deduction for taxpayers to $12,000 from $6,300 for individuals, and to $24,000 from $12,600 for married couples.
» Reduce the current seven individual income tax brackets to three brackets of 12 per cent, 25 per cent and 35 per cent.
» Consider a fourth bracket at a rate higher than 35 percent for high-income Americans to prevent shifting the overall tax burden from higher- to lower-income households.
» Partially repeal the deduction for state and local tax payments.
» Eliminate the $4,050 personal exemption for taxpayers and family members.
» Create a "substantial" increase in the child tax credit, now $1,000; raise the income limit to qualify for the credit; and eliminate the higher qualifying income rate for married couples.
» Create a $500 tax credit for taxpayers with non-child dependents.
» Repeal the individual alternative minimum tax on high-income taxpayers.
» Repeal the estate tax paid chiefly by the richest Americans.