Restructure Tax Brackets

Current Status: In Progress

As of

As part of the Middle Class Tax Relief And Simplification Act:

"The Trump Plan will collapse the current seven tax brackets to three brackets. The rates and breakpoints are as shown below. Low-income Americans will have an effective income tax rate of 0. The tax brackets are similar to those in the House GOP tax blueprint.

  • Brackets & Rates for Married-Joint filers:
  • Less than $75,000: 12%
  • More than $75,000 but less than $225,000: 25%
  • More than $225,000: 33%

*Brackets for single filers are ½ of these amounts"

Individuals who are single and earn less than $25,000 per year will not owe any federal income taxes, along with married couples who jointly earn less than $50,000 per year. Trump estimates that this will help 75 million households. But there is one catch: These workers will still need to send a one-page form to the IRS stating: "I win."

In late April, 2017, Trump announced a draft tax plan that cut seven tax brackets to three, but the plan did not specify any specific numbers for the breaks or any other details on its implementation.

In October 2017, the House passed a budget resolution (H. Res. 553 , H. Con. Res. 71) that specified "substantially lowering tax rates for individuals and consolidating the current seven individual income tax brackets into fewer brackets." The exact brackets were not defined and the resolution remains to be reconciled with the Senate budget proposal.

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References
See also: Economy, Taxes