Saturday, April 29, 2017

Trump Tax Plan Beneficiaries: Top Crust Pals, Wall Street Gurus, Off-Shore Giants

White House Strategy: Dodge, Duck, Deceive, Deny
(Blame DEMS for failures along the way)

The Trump Tax Reform Plan analysis from the Chicago Tribune: In essence he says his tax plan helps middle class, not the wealthy.

(Starting Point: Most tax experts say that is not true).

First lesson for Mr. Trump and this very secretive GOP who now won’t even allow DEMS or healthcare providers at their second round of “repeal and replace” sessions is this piece of advice from long-time member of congress and the longest serving speaker in American history, Rep. Sam Rayburn (D-TX) who once quipped: “There’s no education in the second kick of the mule.”

The only Americans who are very clear winners under the new system are the wealthiest,” said Edward D. Kleinbard, a law professor at the University of Southern California and former chief of staff of Congress’s Joint Committee on Taxation, which estimates the revenue effects of tax proposals.
1.  Repealing the estate tax would affect just 5,300 or so fortunes a year. FYI: For 2017, couples can shield up to $11 million of their estates from any taxation, thus leaving only the largest inheritances subject to taxation. Repealing the estate tax alone would cost an estimated $174.2 billion over a decade, the nonpartisan Tax Policy Center said.

2. Reducing the rate on capital gains, non-corporate business taxes, and those in the highest bracket, as well as repealing the AMT (see more below) would also ease the burden on wealthier Americans. Read here to see the impact of that from CNBC… which is past GOP policy and now about to be “new” GOP policy to rectify the past as some sort of favor, um? Yeah, right … read and weep…!!!

3.  Repeal of the ACA (Obama-care) 3.8 percent surtax on the investment income of high earners, put in place to subsidize health coverage for low-income Americans.

“All those are afflictions of the affluent,” Kleinbard added. Plus, there is no way to know how the mathematics of the Trump proposal would work, since he has not offered any cost estimates, no details about which incomes would be taxed and at what levels, and not provided information about tax deductions or other breaks that might be eliminated to make up for the lost revenue.
Main points of Trump “Plan” as basically only talking points and not a plan:
BIG PROPOSAL THAT BENEFITS TRUMP HIMSELD: He calls for totally eliminating the Alternative Minimum Tax (the AMT) (enacted in 1969 to prevent high-income people from paying no income tax).  Sadly, it has evolved over the years and now impacts about 5 million households, most of them making between $200,000 and $1 million a year.
My Note: I say don’t eliminate it – simply restructure it by reverting back to its original purpose and intent (e.g., have it apply to the super rich to prevent them from paying lower taxes than say a family of 4 making $60,000 a year).
NOTEWORTHY:  In 2005, Trump paid $36.5 million in taxes, mostly due to the AMT. Without it, he would have paid just $5.5 million (according to that 2-page 2005 leaked copy of his tax return on the Maddow show which now we can see was indeed beneficial and not laughable as many made fun of). His new policy would greatly benefit him and other big money bags like him – thus, we clearly see his aim: “Take care of your rich pals first.”

Trump’s chief economic advisor, Gary Cohn said the standard deduction for a married couple would be doubled to $24,000. But that's not double. The standard deduction now for a married couple is $12,700 – double would be $25,400 and he’s the smart banker in the room?
Cohn also said the deduction would create “a zero tax-rate for the first $24,000.”
NOTE: Very few families making $24,000 a year pay federal income tax. (FACT: About 44% of all U.S. households pay no federal income tax, though most pay other taxes due to being low-income (some working more than one job too).

Trump is also silent on whether the tax code would still include the personal tax exemption, which allows most families to exempt $4,050 in income for each spouse and dependent child. (NOTE: During the campaign Trump said he would eliminate the personal exemption – devastating to say the least).
Trump proposed getting rid of the “head of household filing status, which is mainly used by single parents.” (NOTE: That status provides a lower tax rate and a higher standard deduction than filing as a single person). His plan is silent on that now. Trump's new plan is silent on this issue as well.
What is the “middle class” anyway? The median household income in the U.S. is about $55,000, though people living in high-cost areas can make much more than that and still feel like they are in the middle class.
Doubling the standard deduction — or at least raising it to $24,000 — could provide significant tax relief to middle-income families. But whether they pay more or less depends largely on details that have yet to be released.
One of those pesky details is how Trump will structure the tax rates on individual income. Trump has proposed reducing the number of tax rates from seven to three — 10 percent, 25 percent and 35 percent. (NOTE: The administration has yet to determine the income levels for people who would be put in each bracket as pointed out above too).
Trump's plan has the potential to provide big tax cuts to high-income families — unless you live in a state with high state and local taxes (i.e. NYS is #1 @12.7%); #2 is CT @12.6%;  NJ is #3 at 12.2%); #4 tied are WI and IL both @ 11%; all others here from Market Watch).
On the flip side, Trump wants to eliminate the deduction for state and local taxes, a big tax break that benefits millions (NOTE: Especially people living in Democratic-controlled states with high local taxes such as New York, New Jersey and California). Last year, more than 43 million families claimed the deduction, saving them nearly $70 billion.
THE SUPER-RICH: These are the 1 percenters, people like Trump who make millions a year and are worth even more. Trump is proposing big tax cuts for the superrich, including repealing the estate tax.

The federal estate tax is widely misunderstood. The fact is it affects very few estates. If your parents' estate is worth less than $10.9 million, you don't have to worry about this tax. This year, about 5,200 estates will pay the tax, according to the Tax Policy Center. Trump also wants to reduce the top income tax rate from 39.6 percent to 35 percent. But perhaps the biggest windfall for rich people could come from Trump's plan to lower the top tax rate for small business owners from 39.6 percent to 15 percent.
Rich people, including Trump, tend to report a lot of business income. But the true effect of this tax cut will depend on how the Trump administration defines a small business owner. If the tax cut applies to all business income reported on individual tax returns, it would be a huge windfall for many rich families.
Treasury Secretary Steve Mnuchin said Trump will propose safeguards that would prevent rich people from taking advantage of the tax cut, but he provided no details on how that would work.
Related and still most-critical: Mnuchin: Trump has “no intention” of releasing tax returnswhy not?

Presidents since Nixon have released their taxes and with no problem and even while a few were under audit (that is not excuse – can be done).

It is obvious that Trump does not want the public to know who is he is indebted to (e.g., borrowed tons of money from banks and private individuals in China and Russia and from other powerful people and places).

We need to know – we have a compelling need to know.

A long row to hoe as they say – so, say tuned. Besides, it ought to be a Hoot-n-holler

No comments: