Plans for Tax Reform to Face Key Senate Vote

The Republican push for a broad tax overhaul faces a big hurdle this week as senators must approve a budget bill which would clear the way for tax reform to pass the Senate with just GOP support. If at least 50 of the 52 Senate Republicans vote for the budget bill later this week, it will be an early victory for the process, though that won’t assure the tax package will pass sometime in the upcoming months.

For those who have not been following the proposes changes, the key part of the Republican tax reform plan isn’t the individual or even the corporate tax rates. The big news is that the proposed change doubles the standard deduction and provides significant relief and simplicity for most taxpayers.

The plan also calls to double the standard deduction for federal tax filers to $12,000 for individuals and $24,000 for married couples. Personal exemptions are being eliminated and consolidated into bigger standard deduction.

Other changes include repeal of the Alternative Minimum Tax, lower Capital Gains Tax, Repeal of Inheritance Tax, Cutting of the Corporate Tax Rate, and preservation of deductions for Mortgages and Charities.

The number of tax brackets will also change. For individuals the number of brackets is reduced from seven to three: 10 percent, 25 percent and 35 percent.