Corporations, wealthy get breaks under GOP plan

WASHINGTON — The White House and congressional Republicans are finalizing a tax plan that would slash the corporate rate while likely reducing the levy for the wealthiest Americans, with President Donald Trump ready to roll out the policy proposal at midweek.

The grand plan to rewrite the nation’s tax code would be the first major overhaul in three decades, delivering on a Trump campaign pledge and providing a sorely needed legislative achievement. It also is expected to eliminate or reduce some tax breaks and deductions.

The plan would likely cut the tax rate for the wealthiest Americans, now at 39.6 percent, to 35 percent, people familiar with the plan said Monday. They spoke on condition of anonymity ahead of a formal announcement.

In addition, the top tax for corporations would be reduced to around 20 percent from the current 35 percent, they said. It will seek to simplify the tax system by reducing the number of income tax brackets from seven to three.

Republicans are divided over the potential elimination of some of the deductions. They’re in agreement on wanting to cut tax rates and simplify the byzantine tax system but they’re divided over whether to add to the government’s ballooning debt with tax cuts. The GOP also is at odds over eliminating the federal deduction for state and local taxes.

Treasury Secretary Steven Mnuchin says the administration wants to eliminate or reduce it because the federal government shouldn’t be subsidizing states and wealthy households.