Trump tax plan: Relief for his voters but lots of unknowns
May 03 2017 by Alex Thomas
The administration expects lower taxes to spur faster growth, making up for the shortfall, but if not, the deficit would rise substantially. Both cheerfully fielded questions after their initial presentation.
As presented, the plan allocates much of the tax relief to the wealthy, which means it will be hard to get votes from Democrats. There will surely be compromises along the way, and while I don't like to be pessimistic, my guess is that the compromises will all make Trump's proposals worse. While Wall Street has been optimistic about the prospect of corporate tax cuts since Trump's election in November, the stocks rally has stalled lately because of a lack of clarity about Trump's policies and concern over his failure to push through a healthcare bill. Moreover, "instead of a single form, the IRS now has 199 tax forms on the individual side" of the tax code. "You saw previous year, GDP at 1.6 percent".
(3) a 35 percent bracket.
"We are going to double the standard deduction, so that a married couple won't pay any taxes on the first Dollars 24,000 of income they earn". Many also are likely already at the lower tax rates, which means they may not benefit from the proposal, said Emilio Escandon, a certified public accountant with the firm MBAF in NY.
The alternative minimum tax (AMT) will be repealed. When asked about it at the roll-out briefing, Director of the National Economic Council Gary Cohncalled such information a "micro-detail".
"We're committed to keeping charitable deductions and mortgage interest but everything else is on the table and this is about tax simplification".
Maybe it has to do with Trump's tax plan, which can only be as successful as the disastrous healthcare plan he withdrew at the last minute. "Also some indication of what the rates are going to be", Mulvaney told Fox News on Sunday.
Treasury Secretary Steve Mnuchin made similar comments yesterday at the White House.
There are still many unknowns about the Trump proposal, in particular, what changes Congress might make to offset the drop in tax revenue that lower rates would likely bring. They include everything from the corner grocery store and other Main Street businesses, to big accounting firms, medical practices and private investment partnerships like hedge funds.
If the CRFB estimates are correct, the Trump tax plan could push the country's accumulated debt to 111% of gross domestic product by 2027, higher than any time in US history and far above the 89% now projected by the CBO.
And those criticisms could mean Republicans will be on their own when it comes to passing the biggest attempt at tax reform and tax cuts since Ronald Reagan did it more than 30 years ago. On Thursday, Mnuchin again defended Trump's lack of transparency, asserting that what the American public cares about is not Trump's taxes, but about "creating jobs and economic growth".
Small and medium-size businesses will be eligible for the business rate as well, Mnuchin added.