Summary of the Fiscal Impacts of the Senate Tax Reform Plan
For individuals:
1. There would be seven tax brackets: 10, 12, 22, 24, 35 and 38.5% -- Tax savings of $1.1 trillion over 10 years (sunsets 12/25)
2. The standard deduction would be increased to $12,000 for individuals, $24,000 for couples and $18,000 for a single parent head of household – Tax savings of $737 billion over the next decade. (sunsets 12/25)
3. Repeal of the personal exemption deduction – Tax revenues of $1.2 trillion (sunsets 12/25)
4. Alternative CPI adjustment – Tax revenues of $134 billion
5. Reduced taxes for pass through income for Subchapter S and other owner owned businesses – Tax savings of $362 billion (sunsets 12/25)
6. Increase child tax credit to $2,000 – Tax savings of $584 billion (sunsets 12/25)
7. Repeal of many itemized deductions, such as deduction for state and local taxes – Tax revenues of $978 billion. (sunsets 12/25)
8. Repeal of alternative minimum tax for wealthy individuals – Tax savings of $769 billion (sunsets 12/25)
9. Double estate and gift tax exemptions to $11 million for an individual estate – Tax savings of $83 billion (sunsets 12/25)
10. Reduces shared responsibility under the ACA to zero – budget savings of $318 billion, assumes fewer individuals enroll in Exchanges and Medicaid as a result
11. Cap on pass through losses – Tax revenues of $137 billion (sunsets 12/25)
12. Total individual taxpayer reductions of $886 billion (sunsets 12/25)
For corporations:
1. Reduction of corporate income tax rates from 35% to 20% -- Tax savings of $1.3 trillion
2. Repeal of alternative minimum tax for corporations -- Tax savings of $40 billion
3. Limit net interest deductions – Tax revenues of $308 billion
4. Modification of net operating loss deduction – Tax revenues of $156 billion
5. Repeal deduction for domestic production – Tax revenues of $80 billion
6. Limit on deductions for employee meals and travel expenses – Tax revenues of $40 billion
7. Modification of tax credits for clinical testing of drugs for treatment of rare diseases – Tax revenues of $30 billion
8. Capitalization of insurance policy acquisition expenses -- Tax revenues of $30 billion
9. Total corporate tax reductions of $683 billion (no sunset)
International tax reforms
1. Deductions for dividends from foreign corporations – Tax savings of $215 billion
2. Treatment of deferred foreign income on transition to US – Tax revenues of $185 billion
3. Inclusion of global intangible low taxed income – Tax revenues of $135 billion
4. Base erosion and anti abuse tax -- Tax revenues of $137 billion
5. Total international tax reforms -- Tax revenues of $154 billion
Total tax package = revenue loss of $1.4 trillion, added to federal deficit.