After weeks of speculation, the details of the House of Representatives plan to cut taxes were unveiled today with the presentation of the Tax Cuts & Jobs Act.
As expected, it would make sweeping changes to the U.S. tax code.
For business, the corporate tax rate would drop from 35 percent to 20 percent, while small businesses that pay their taxes through the individual income tax could cap their rate at 25 percent. The bill would lower the individual income tax rates for all but those in the highest tax bracket and nearly double the standard tax deduction while eliminating or curtailing specific tax deductions.
On some of the more controversial issues, the plan keeps the mortgage interest deduction for existing mortgages, but caps it for newly purchased homes at $500,000.
Similarly, the plan would keep the deduction for state and local property taxes but cap it at $10,000. However, the deduction for state income taxes would be eliminated.
The deduction for charitable contributions is maintained, and the level of tax-free contributions to 401(k)s and Individual Retirement Accounts would remain unchanged.
Finally, the plan would eliminate both the alternative minimum tax and the estate tax. The estate tax would be phased out over six years.