WASHINGTON (CBSMiami) – House Republicans are touting their new overhaul bill which claim will give the middle class the biggest benefits.
Democrats, though, insist for many, the exact opposite is the case. There are already indications lots of compromises will be required to get the plan through.
“Tax cuts, if we get this through and I think we will, you’re going to see this economy take off like a rocket ship,” said President Donald Trump during an interview with Fox News Thursday night.
He called the GOP tax overhaul plan “the biggest tax cuts in the history of our country”.
“The middle class is a big beneficiary, jobs, and companies are big beneficiaries,” he added.
The plan would slash the number of individual tax brackets from seven to four, the top rate would remain at 39.6 percent, but it would only apply to households making a million dollars or more.
The median household, making 60 thousand dollars a year would see its rate drop from 15 percent to 12.
The plan would also double the standard deduction to 12-thousand dollars for individuals and 24-thousand dollars for married couples.
House Speaker Paul Ryan says a typical family of four will save $1,182-dollars a year.
“That $1,182 more covers about a year’s worth of gas for your car, it covers your family’s phone bill for the year,” said Ryan.
But Democrats insist eliminating a deduction for state and local income taxes hurts those in high tax states like California and New York.
“What they won’t tell you is that many, many, many middle-class families will see their taxes go up under this plan,” said Sen. Chuck Schumer, D-NY.
Some of the other changes included in the plan: growing the child tax credit from $1,000 a year to $1,600. The plan would also lower the corporate tax rate from 35 percent to 20 percent and eliminates deductions for student loans and medical expenses.
The bill will need the backing of nearly every Republican to pass.