America’s top earners could end up being put into a fourth, higher tax bracket under the Republican Party’s tax plan, long-awaited details of which are scheduled to be released on Wednesday.
While the structure was widely expected to be three brackets with a top rate of 35%, the new plan allows for an extra bracket with a top rate somewhere between 35% and the current 39.6%, according to The Wall Street Journal. Although the exact rate and income level haven’t been determined yet, that decision would divide the wealthiest Americans into two tax brackets, with the country’s richest individuals paying slightly more.
President Donald Trump has committed to a tax cut for the middle class, though there has been public outcry, especially from Democrats, about giving a tax break to the wealthy. The addition of the extra tax bracket could provide a pathway toward assuaging those concerns as the Trump administration works to enact what it says will be an historic tax overhaul.
The tax reform plan reportedly contains three other set tax brackets of 12%, 25% and 35% on the individual side. It is also expected to call for a corporate tax rate as low as 20%, down from the current 35% level, but higher than Trump’s desired 15%.The standard deduction for individuals will be nearly doubled and the “pass-through” rate for businesses will be set at 25%.
FOX Business has also learned that the tax plan will allow businesses to immediately expense 100% of new investment for 5 years.