President-elect Donald Trump calls for major tax reform
What will our tax system look like under a Donald Trump presidency? Both the House Republicans and Trump Administration have outlined their proposed tax plans. Although there are slight differences between the two plans, they both aim to simplify the tax code and reduce taxes for all. Here are some of the major takeaways from the proposed reform.
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Photo by: Michael Vadon[/caption]

For individuals, the Trump tax plan includes:
- The number of individual tax brackets would be cut from the current amount of seven to three. The new rates would be 0%, 12%, 25%, and 33%, quite a bit lower than the current rates, with the highest current rate at 39.6%.
- Taxes on long-term capital gains would remain the same at rates of 15% and 20%.
- The 3.8 Net Investment Income Tax on interest, dividend, capital gains, and other investment income would be eliminated.
- The Alternative Minimum Tax would be eliminated.
- He would increase the standard deduction from $12,600 for Married Filing Joint taxpayers to $30,000. For those that itemize deductions (from home mortgage interest, charitable contributions, state deduction), this would likely not change if those itemized deductions exceed $30,000.
- Personal exemptions would be eliminated. An above-the-line deduction for child care would be available for children under 13 for taxpayers making under $500,000 ($250,000 for Single).
For businesses:
- The corporate tax rate would lower from 35% to 15%.
- The Alternative Minimum Tax would be eliminated.
- He also proposes a repatriation of corporate profits held offshore at a one-time tax rate of 10%.
- Firms involved in manufacturing would be given the option to immediately expense the cost of new assets in lieu of giving up the ability to deduct interest expense.
- Many tax credits, other than the research credit, would be eliminated.