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).
KEY POINTS FOLLOWING THIS SHORT INTRO:
“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:
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 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.
A long row to hoe as they say – so, say tuned. Besides, it ought to be a Hoot-n-holler