GOP Tax Plan: What We Know and What We Don't

By Richard Rubin Features Dow Jones Newswires

The Republican plan to overhaul the U.S. tax code proposes to sharply reduce tax rates on businesses and many individuals but leaves several important details to the tax-writing committees in Congress.

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Individual Tax Brackets

What We Know:

Collapses seven brackets into three

Basic rate structure is 12%, 25% and 35%, replacing 10%, 15%, 25%, 28%, 33%, 35% and 39.6%

No changes to capital-gains and dividend tax rates

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Changes to method for indexing brackets to inflation

What We Don't:

Income break points for tax brackets

Possible additional top rate above 35%

Individual Tax Breaks

What We Know:

Standard deduction nearly doubled for many households

State and local tax deduction eliminated

Mortgage and charity breaks protected

Bigger child tax credit

$500 tax credit for households with non-child dependents

Retains exemption of municipal bond income

Repeals personal exemption

What We Don't:

Details of child tax credit changes

Specific changes to the earned income tax credit

Business Taxes

What We Know:

Corporate tax rate at 20%, down from 35% currently

Tax rate on businesses reported on individual returns at 25%

Limits on deductions for interest for corporations

Allows immediate write-offs of business investment for at least five years

Preserves tax breaks for research and low-income housing

Repeals deduction for domestic manufacturing

What We Don't:

Rules to prevent business owners from reclassifying wages as business income

Details of interest deduction limits

What happens to investment write-offs after five years

Which other tax breaks survive

Corporate Foreign Income

What We Know:

One-time tax on stockpiled foreign profits

Higher one-time tax on cash than on illiquid foreign assets

Tax-free repatriation of future foreign profits

What We Don't:

Specific one-time tax rates

Rules to prevent companies from shifting profits abroad

Other Changes

What We Know:

Repeals estate tax

Repeals alternative minimum tax

What We Don't:

Which households pay more and which pay less

How much the tax plan would add to the deficit

Write to Richard Rubin at richard.rubin@wsj.com

(END) Dow Jones Newswires

September 27, 2017 11:25 ET (15:25 GMT)