Nov. 2 (UPI) -- House Republicans on Thursday released their highly anticipated plan to reform the U.S. tax code -- which aims to cut the corporate rate and reduce the number of tax brackets.
The Tax Cut and Jobs Act is the first tax code overhaul since 1986.
Speaker Paul Ryan, appearing with families and GOP House members said at a news conference Thursday, "this plan is for the middle-class families in the country who deserve a break -- families who are living paycheck to paycheck."
"We are making the tax code so simple -- so simple that you can do your taxes on a form the size of a postcard," he added.
"To provide simplicity and fairness, the framework eliminates many itemized deductions that are primarily used by the wealthy, but retains tax incentives for home mortgage interest and charitable contributions -- as well as tax incentives for work, higher education, and retirement security," a summary of the plan states.
The GOP plan aims to cut the corporate tax rate from 35 to 20 percent, double the standard deduction, increase the child tax credit to $1,600, eliminate the estate tax and the alternative minimum tax and caps the tax rate for small and family-owned businesses at 25 percent.
The plan also imposes a one-time, low tax rate on wealth accumulated overseas -- allowing no tax incentive for keeping money offshore.
The Republican plan does not, however, change rates for 401(k) and Individual Retirement Accounts or charitable deductions. However, it would repeal the personal exemption of $4,050 and itemization for medical expenses.
Under the plan, the cap on the mortgage deduction would drop from $1 million to $500,000 -- and would cap state and local tax deduction (SALT) at $10,000. Republicans in high-tax states like New York and California had voiced opposition to SALT changes.
The plan retains a tax rate of nearly 40 percent for top individual income earners and cuts the number of brackets from seven to four. The highest bracket applies to single filers making more than $500,000, an increase from a $418,000 threshold -- and $1 million for married couples filing jointly, up from the current $470,000.
The other brackets are 12 percent (for single filers making between $12,000-$45,000 per year and married filers at $24,000-$90,000, after deductions), 25 percent (beginning at $45,000/$90,000) and 35 percent (beginning at $200,000/$260,000).
According to the United States Congress Joint Committee on Taxation, the bracket change would reduce government revenues by $961.2 billion over 10 years.
The standard deduction increases from $6,350 to $12,200 for single filers under the new plan, $12,700 to $24,400 for married couples and $9,250 to $18,300 for "head of household" filers. The larger deduction would replace the personal exemptions.
According to JCT, the abolishing the personal exemptions would increase revenues by $1,562.1 billion from 2018-2027.
For an average family of four making $60,000, Ryan said their tax bill will drop $1,182 to under $500.
"This will make a real difference," the House speaker said. "It's about a year's worth of gas, or a phone bill, depending on how much data your kids use. They can pay down their debt."
House Republicans delayed revealing the plans from Wednesday to Thursday to work out various parts of the plan.
"Real relief from today's complex and costly tax code is on the way," House Ways and Means Chairman Kevin Brady said. "This is relief for American family, relief for workers."
"Republicans are ambushing the American people with a half-baked tax bill," she said shortly before the bill was released, adding that Republicans are "perpetuating a catastrophic transfer of wealth from the middle class to corporations and the wealthy."
House Republicans hope to get the new tax law passed before Thanksgiving and advance it to the Senate by the end of the year. Trump said he wants to sign the bill before Christmas.
Last week, the House of Representatives narrowly passed a $4 trillion budget resolution for next year, which was needed to fast-track the tax overhaul. The budget allowed lawmakers to pass a bill that adds up to $1.5 trillion to the deficit.