Be wary of White House claims about tax plan

Steve Mnuchin

That description, however, is sharply at odds with what details the administration has put forward thus far.

The top individual income-tax rate is now 39.6 percent, though Trump's plan would cut that to 35 percent.

A typical middle class family would save about $1,000 on their taxes, according to a Tax Policy Center analysis of the tax plan Trump pitched on the campaign trail. Here's a breakdown of who stands to benefit the most. But pass-through income is taxed only once, said Chuck Marr, director of federal tax policy at the Center on Budget and Policy Priorities.

Another key point in Trump's tax plan is simplification.

The plan Mnuchin and Cohn announced last week has been criticized for being sparse on details.

For example, the plan would eliminate the tax deduction we now have for the Wisconsin income taxes we pay. The administration has said its tax cuts will spur growth, bringing in tax revenues to make up the difference, a calculation known as "dynamic scoring" which the Trump administration supports. In addition to reducing the rate from 39.6 percent to 35 percent, Trump would also eliminate the estate tax - which is paid nearly exclusively by wealthy heirs when a family member passes away - and a 3.8 percent surcharge that the rich pay on income from their investments imposed as part of President Barack Obama's health-care reforms, also known as Obamacare.

Individuals in the highest tax brackets: Similarly, since the plan proposes to drop the top tax rate from 39.6 percent to 35 percent, individuals in those brackets would see major savings. This could ease the burden on companies operating overseas as they had faced a 35 per cent tax on global profits, which they can defer until they return those earnings to the US.

So, sure, let's lower the official corporate tax rate while reducing loopholes, but don't pretend this will create a ton of new jobs.

More news: Earnings Forecast of Groupon, Inc. (GRPN)

Squarely in the good news category is preservation of the charitable contributions deduction, which was feared to be on the chopping block.

Republicans who have railed against the national debt argued that the tax cut will stimulate the economy. One out of 700 estates are big enough to qualify.

Mnuchin declined to set a deadline for the reform passing Congress, but he said the administration was aiming to "get this done this year". The other rates would reportedly by 25 percent and 10 percent.

Trump also plans to propose a tax on over $2.6 trillion in offshore earnings.

A proposal made by the Trump administration Wednesday would likely cause middle-class and wealthy Californians who itemize their federal tax returns to pay hundreds or thousands of additional tax dollars each year.

The CRFB notes that by its estimates, Trump's tax plan would lead the US debt to rise to its highest point in history, and "no achievable amount of economic growth could finance it". Depending on where you live, and how many deductions you take, you might end up paying more. Those with many members or single parents are particularly at risk.

While eliminating the SALT deduction could save the federal government a massive amount of money, it also benefits many people in three states: New Jersey, New York, and California. In all, that plan was projected to increase taxes on about 8 million families.

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