"We want tax reform that is pro-growth, pro-jobs, pro-worker, pro-family, and - yes - tax reform that is pro-American", Trump said. The plan would keep the popular mortgage-interest and charitable-giving deductions but calls for ending many others, but legislative committees will sort out the details.
One immediate objective of the framework is to secure House GOP approval for a budget resolution to unlock the Senate's procedure for passing a tax bill without Democratic support. The "death tax" would also be ended.
It was negotiated by the "Big Six", which includes House Speaker Paul Ryan, Senate Majority Leader Mitch McConnell, Treasury Secretary Steve Mnuchin, the National Economic Council's Gary Cohn, Ways and Means Chairman Kevin Brady, and Head of the Senate Finance Committee Orrin Hatch.
"It's time for Washington to learn from the wisdom of Indiana", Trump said.
By refusing to specify on Wednesday which tax breaks could be jettisoned, GOP leaders make a calculated effort to try to postpone any backlash while they try to build a coalition.
"I get that we want to move to 3 percent but I'd like to know how", Kennedy said referring to Trump's ambitious goal of annual growth in the economy through tax cuts. One vulnerable incumbent, Indiana Sen.
To help, President Donald Trump is traveling to Indianapolis later Wednesday to begin to sell the plan to the public.
The proposed changes would affect almost every taxpayer, and they seek to balance significant rate cuts for businesses with measures created to help the middle class.
This is good news for Republicans, as the state and local tax deduction (SALT) is most valuable in blue states like NY and New Jersey, but bad news for tax payers in those states.
Altering individual tax brackets.
The plan would likely cut the tax rate for the wealthiest Americans, now at 39.6 percent, to 35 percent, people familiar with the plan say.
The perk - first enacted with the income tax in 1913 - is most heavily used in coastal, bluer states that include New York, California, New Jersey and CT. "No, I don't benefit". "Very, very strongly I think there's very little benefit for people of wealth".
Republican leaders have acknowledged that the plan, if enacted, initially would add to the budget deficit. And many supply-side Republicans are skeptical of the "economic value" of child tax credits. Bernie Sanders, I-Vt. Repealing it could raise $1.3 trillion over 10 years, according to the Tax Policy Center. The standard deductions for married families and individuals would double, but the personal exemption would disappear, offsetting part of that gain. The GOP also is at odds over eliminating the federal deduction for state and local taxes. Republicans from those states are vowing to fight it. The credit now is $1,000 per child.
Increase the child tax credit and provide a $500 credit for care of nonchild dependents.
The current seven tax brackets would be reduced to three: 12 percent, 25 percent and 35 percent. It mentions the potential for one additional top rate "to ensure that the wealthy do not contribute a lower share of taxes paid than they do today".
The rate is "going to be substantially lower so we bring jobs back into our country", Trump said. They would pay at a 25 percent rate, down 39.6 percent. This creates a possible loophole for rich investors, lawyers, doctors and others; administration officials say they will design measures to prevent any abuses.