Noviembre 29, 2020

Mass., other blue states are in crosshairs of GOP tax plan

29 Setiembre 2017, 08:09 | Bibiana Flor

President Donald Trump waves before speaking about his tax plan in Indianapolis

President Donald Trump waves before speaking about his tax plan in Indianapolis

The middle-class could come out ahead, too, but the plan has too many holes to determine how individual taxpayers would be affected.

It calls for cutting the corporate tax rate to 20 from 35 percent, the small business rate to 25 from 39.6 percent and the top individual rate to 35 from 39.6 percent.

The plan would broaden the lower income levels at which no tax is levied. Trump spoke about the proposed Republican tax reform plan. This makes it hard to calculate how much exactly he will benefit from the proposed plan, however, certain provisions in the plan show that he will surely benefit largely from it.

Most important to that end is the suggested 20 percent tax rate for corporations, down from 35 percent, the resolution of our one-off treatment of overseas-earned income and lower taxes for so-called "pass-through" entities.

The same poll found that 42% of Americans - a pretty significant chunk of the electorate - doesn't want Congress to cut taxes at all. This is the overwhelming majority of American businesses, from small mom-and-pop outfits to large partnerships.

Under current law, almost 70 percent of taxpayers claim the standard deduction, while the remaining 30 percent itemize their deductions.

Getting rid of this tax could save the Trump family as much as $1.4 billion if the Forbes estimate that Trump is worth $3.5 billion is correct. Under current law, the first $11 million of an estate is exempt for a married couple, meaning only the wealthiest pay it.

-U.S. -based worldwide corporations. In the past year that we've seen Trump's tax returns, 2005, the AMT forced him to pay $31 million in federal taxes he otherwise would not have had to pay. The plan would deeply reduce taxes for corporations, and simplify tax brackets and almost double the standard deduction used by most tax filers. Take a single person who doesn't have much to write off, and therefore takes the standard deduction of $6,300.

"If we allow a family to keep another thousand dollars of their income, what does that mean?" he asked.

Trump also wants to cut the alternative minimum tax.

Financial markets rallied on the plan's unveiling, an event long anticipated by traders betting that stocks would benefit from both faster economic growth and inflation. I am one of the 45 percent filers that use that deduction to meet the benefit of itemizing. About 30 percent of US taxpayers itemize their deductions. Removal of this deduction will surely reduce my after tax net worth as standard deductions always fall far short of fair. "I remain opposed to eliminating the deductions for state and local taxes as this would represent, in effect, double taxation on the taxes paid to state and local governments".

Meanwhile, Trump has taken to his social media platform of choice, Twitter, to spruik the plan.

Trump's proposal also offers write-offs for companies that move their manufacturing plants to the USA and would incentivise the repatriation of "trillions" of dollars in United States companies' profits stashed in tax havens overseas.

Tax experts told CNBC that it would be hard for Congress to exempt such partnerships from the pass-through rate.

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