U. S. Individual Taxes: Individual Rates; Capital Gain Rates; AMT; Credits and Deductions; Employment Taxes; Retirement Incentives; Health Care
U.S. Business Taxes: Corporate Rate; Capital Investment
International Business Taxes
U.S. Individual Taxes
Three brackets (12%, 25%, and 33%). Single taxpayers earning less than $37,500 and married filing jointly taxpayers earning less than $75,000 pay at a 12% rate; $37,501 to $112,500 ($75,001 to $225,000 for MFJ) taxed at a 25% rate; more than $112,501 ($225,00 for MFJ) taxed at a 33% rate. Eliminates head of household filing status.
Capital Gain Rates and Investments
Maintains current law for taxation on capital gains: maximum rate of 20%. Carried interest will be taxed at ordinary rates. Repeal 3.8% tax on net investment income.
Credits and Deductions
Increase the standard deduction for joint filers to $30,000 and to $15,000 for single filers.
Personal exemptions will be eliminated. Cap itemized deductions at $200,000 for married filing jointly and $100,000 for single taxpayers. Allow above-the-line deduction for childcare for children under age 13 capped at the state average for age of child, and for eldercare for a dependent. No deduction allowed for married filing jointly taxpayers with total income over $500,000 and for single taxpayers with total income over $250,000. Deduction limited to four children per taxpayer. Use of stay-at-home parent or grandparent permitted. Eldercare deduction capped at $5,000 per year, increased by inflation. Spending rebates for childcare expenses to certain low-income taxpayers through the EITC. Rebate equal to 7.655 of remaining eligible childcare expenses, subject to a cap of half of the payroll taxes paid by the taxpayer (based on the lower-earning parent in a two-earner household). Married joint filers earning less than $62,400 ($31,200 for single taxpayers) eligible for the rebate. Establish dependent care savings accounts (DCSAs) with annual contributions up to $2,000 per year. Can be set up for unborn children. When child reaches age of 18, any unused funds can be used for education expenses, but contributions to the account are not allowed. For lower-income taxpayers, government will provide a 50% match on parental contributions of up to $1,000 per year. Earnings are exempt from tax and rollover each year if unused.
Repeal Obamacare and all associated taxes, but maintain pre-existing condition and children on parent’s healthcare plan up to age 26 provisions.
U.S. Business Taxes
Corporate Tax Rates
One rate of 15% for all businesses, regardless of size. Eliminates corporate alternative minimum tax.
Eliminate most corporate expenditures, except for the research and development credit.
U.S. manufacturing companies can elect to expense capital investment and lose the deductibility of corporate interest expense. Election can only be revoked within the first three years of the election and if revoked, returns for prior years would need to be amended to show revised status. After three years, election is irrevocable.
The business tax credit for on-site childcare increased to $500,000 (from current-law $150,000) per year and recapture period at five years (down from current-law 10 years).
International Business Taxes
One-time deemed repatriation at 10% rate.
Repeal the estate tax. Capital gains held until death and valued over $10 million will be subject to tax to exempt small businesses and family farms. Disallows contributions of appreciated property into a private charity established by the decedent or the decedent’s relatives.