President Trump and Republican leaders are unveiling a tax code reform plan that promises to cut taxes for individuals and corporations, simplify the tax system, and nearly double the standard deduction used by most Americans.
Iowa Senator Chuck Grassley, a member of the Senate Finance Committee, says the plan would benefit Iowans by reducing individual rates from seven to three brackets, while it would cut the corporate tax rate down from 35 to 20-percent.
“It would try to treat small business and individual farm operations a little more fairly compared to C corporations,” Grassley says. “You’d have three tax brackets of 10, 25 and 35 for individuals.” Under the proposal, the bottom tax rate could increase from 10 percent to 12 percent. Grassley thinks there will be push-back by both Democrats and Republicans to have that stay at 10 percent.
“Why would you want to raise taxes on lower-income people?” Grassley says. “Of course, it would apply to higher-income people, because that’s where even if you’re a multi-millionaire, you’re still going to pay the tax, 10 percent, for part of your income, even though it goes up to about 40 percent overall. But you wouldn’t want to do it at a time when you might already be accused of giving too much tax breaks to higher-income people.”
Grassley says he thinks the tax reform bill will get through Congress quickly and be on the president’s desk by Thanksgiving.
(By Bob Fisher, KRIB, Mason City)