Wednesday, April 26, 2017 5:39:38 PM
The 7 Key Elements of the White House Tax Plan
By ALAN RAPPEPORT APRIL 26, 2017
Treasury Secretary Steven T. Mnuchin appeared on a television at the New York Stock Exchange on
Wednesday. Credit Richard Drew/Associated Press
WASHINGTON — Here are the most important changes in the tax plan proposed Wednesday by President Trump.
Three Tax Brackets
The number of tax brackets for individuals is reduced from seven to three: 10 percent, 25 percent and 35 percent. That lowers the top rate by nearly 5 percentage points, easing the tax burdens on most Americans, including the rich. The Trump administration did not say where those brackets begin and end.
Double the Standard Deduction
Currently, individuals can deduct $6,350 and married couples can deduct $12,700 from their taxable income. Mr. Trump’s plan would double the standard deduction. That is intended to put more money in the pockets of the average taxpayers who do not itemize their deductions. It has the added benefit of simplifying the preparation of tax returns for more people.
Repeal of A.M.T.
The alternative minimum tax .. http://topics.nytimes.com/top/reference/timestopics/subjects/a/alternative_minimum_tax/index.html?inline=nyt-classifier .. makes it harder for very rich individuals to game the tax system and pay less tax. It is an aggravating tax for the well-to-do, what Treasury Secretary Steven T. Mnuchin called a “complicated” additional system of taxation. The provision cost Mr. Trump an additional $31 million in federal income taxes in 2005, and now he wants to kill it.
Lower Capital Gains Tax
Under the plan, the top federal capital gains rate is cut from 23.8 percent to 20 percent. This is achieved by eliminating a 3.8 percent tax that is used to fund the Affordable Care Act. The reduction is meant to create greater incentives for people to invest.
Repeal of Inheritance Tax
What some Republicans called the “death tax” dies under the Trump plan. According to the Tax Foundation, America’s inheritance tax as of 2014 is the fourth highest in the world. Although the administration said that the tax was a burden on farmers and small businesses, critics of Mr. Trump will likely complain that he is helping his family and rich friends.
Mortgage and Charitable Deductions Preserved
Mr. Trump wants to eliminate all individual tax deductions except for those that relate to mortgage interest and charitable giving. Those are two of the most popular provisions in the current tax code. However, these could become unnecessary to most taxpayers because of the much higher standard deduction. State and local taxes would no longer be deductible, a concern for people in high-tax states .. https://taxfoundation.org/which-places-benefit-most-state-and-local-tax-deductions-0/ .
Cut the Corporate Rate
Lowering the corporate tax rate from 35 to 15 percent is one of the most aggressive moves that Mr. Trump is making in his plan. The administration says it gets the rate down to where it is for most other industrialized nations. The Tax Foundation says this will reduce revenues by $2 trillion over 10 years and it is not clear that it will generate enough economic growth to compensate for that. The plan also calls for a special one-time tax—though the rate was not disclosed—to entice companies to bring back money they made overseas.
Corporate Tax Rates Are Falling Worldwide
The United States has the highest corporate tax rate among the world’s industrialized nations, several of whom have recently cut their rates.
IMAGE - Source: Organization for Economic Cooperation and Development; KPMG
https://www.nytimes.com/2017/04/26/us/politics/white-house-tax-plan.html
See also:
Lindsey Graham, "Trump’s budget “dead on arrival.”"
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=130765086
By ALAN RAPPEPORT APRIL 26, 2017
Treasury Secretary Steven T. Mnuchin appeared on a television at the New York Stock Exchange on
Wednesday. Credit Richard Drew/Associated Press
WASHINGTON — Here are the most important changes in the tax plan proposed Wednesday by President Trump.
Three Tax Brackets
The number of tax brackets for individuals is reduced from seven to three: 10 percent, 25 percent and 35 percent. That lowers the top rate by nearly 5 percentage points, easing the tax burdens on most Americans, including the rich. The Trump administration did not say where those brackets begin and end.
Double the Standard Deduction
Currently, individuals can deduct $6,350 and married couples can deduct $12,700 from their taxable income. Mr. Trump’s plan would double the standard deduction. That is intended to put more money in the pockets of the average taxpayers who do not itemize their deductions. It has the added benefit of simplifying the preparation of tax returns for more people.
Repeal of A.M.T.
The alternative minimum tax .. http://topics.nytimes.com/top/reference/timestopics/subjects/a/alternative_minimum_tax/index.html?inline=nyt-classifier .. makes it harder for very rich individuals to game the tax system and pay less tax. It is an aggravating tax for the well-to-do, what Treasury Secretary Steven T. Mnuchin called a “complicated” additional system of taxation. The provision cost Mr. Trump an additional $31 million in federal income taxes in 2005, and now he wants to kill it.
Lower Capital Gains Tax
Under the plan, the top federal capital gains rate is cut from 23.8 percent to 20 percent. This is achieved by eliminating a 3.8 percent tax that is used to fund the Affordable Care Act. The reduction is meant to create greater incentives for people to invest.
Repeal of Inheritance Tax
What some Republicans called the “death tax” dies under the Trump plan. According to the Tax Foundation, America’s inheritance tax as of 2014 is the fourth highest in the world. Although the administration said that the tax was a burden on farmers and small businesses, critics of Mr. Trump will likely complain that he is helping his family and rich friends.
Mortgage and Charitable Deductions Preserved
Mr. Trump wants to eliminate all individual tax deductions except for those that relate to mortgage interest and charitable giving. Those are two of the most popular provisions in the current tax code. However, these could become unnecessary to most taxpayers because of the much higher standard deduction. State and local taxes would no longer be deductible, a concern for people in high-tax states .. https://taxfoundation.org/which-places-benefit-most-state-and-local-tax-deductions-0/ .
Cut the Corporate Rate
Lowering the corporate tax rate from 35 to 15 percent is one of the most aggressive moves that Mr. Trump is making in his plan. The administration says it gets the rate down to where it is for most other industrialized nations. The Tax Foundation says this will reduce revenues by $2 trillion over 10 years and it is not clear that it will generate enough economic growth to compensate for that. The plan also calls for a special one-time tax—though the rate was not disclosed—to entice companies to bring back money they made overseas.
Corporate Tax Rates Are Falling Worldwide
The United States has the highest corporate tax rate among the world’s industrialized nations, several of whom have recently cut their rates.
IMAGE - Source: Organization for Economic Cooperation and Development; KPMG
https://www.nytimes.com/2017/04/26/us/politics/white-house-tax-plan.html
See also:
Lindsey Graham, "Trump’s budget “dead on arrival.”"
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=130765086
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