The president’s tax reform proposal would eliminate all income and payroll taxes, and replace them with a two-step process.
Under this process, the top rate would drop from 39.6% to 25% while the top tax rate would fall to 39.7% from the current 35%.
Under the plan, the highest tax rate on capital gains would drop to 15%, the lowest rate would be 19%, and the rate on dividends would drop significantly.
But the plan would also repeal the estate tax and the Alternative Minimum Tax, which would cut federal revenue by $1.5 trillion over the next decade.
That’s an enormous number of people losing out, and the vast majority of Americans would be better off if their taxes were lower.
So how does the plan work?
It’s not quite perfect, but the Trump administration is making some major changes to the plan that would mean it could be very effective at raising taxes for the vast numbers of Americans who already pay higher taxes than they pay now.
The Trump administration announced that it’s working with the Congressional Budget Office to update its plan for tax cuts, and it is looking to reduce the number of brackets that are affected.
Under the new plan, you could get a tax cut on your first $200,000 of income by doubling the standard deduction to $10,000, and then doubling the child tax credit to $2,000.
This means that you could have a tax break on $1 million of income in the first $10 million of the year, and $1,000 for every $10 in the second $10.
You could get the same tax cut in the third and fourth years of the plan.
And in the fifth year of the tax cut, the average tax rate that you would pay on the first and last $1 of your income would be reduced to 15%.
That means that by 2025, your average tax bill could be reduced by $3,800.
In 2019, it could fall to $3.70 for the average income, and by 2025 it could drop to $1 for the first two income brackets and $0.70 and $2 for the fifth.
Under Trump’s plan, if you are married filing jointly, you’d pay an additional $1 in taxes in 2018, and in 2019, that rate would jump to $4,000 and in 2020, to $6,000 to $9,000 per year.
That means you’d have to pay about $4 million in taxes over the course of a full 10-year period, according to a report from the Tax Policy Center.
The bottom line: The Trump plan would likely increase taxes for millions of Americans.
The tax plan would reduce revenue, and many Americans would have to cut back their taxable income.
But if Trump can get all his tax cuts passed, he’ll still be able to claim a $1 trillion in tax cuts.