Again, without Trump’s tax returns, it’s impossible to say which breaks in those broad categories he relies on to reduce his taxable business income.
The Trump administration unveiled their tax plan yesterday, with details to follow.
“That’s the heavy lift”, said Rep. Dave Brat, R-Va.
AMP chief economist Shane Oliver has also said that if Australia is unable to compete with the U.S. tax rate, companies may decide to move their head office from Australia to the US.
Which ones? “We have to have that discussion”, Collins said. This is the famous discredited theory of supply-side economics. Though specifics are still unclear, under one portion of the new plan, corporations-including Kentucky’s most profitable companies-would get a tax break. Trump is considering raising the Child and Dependent Care Tax Credit, a tax break that now allows parents to reduce their tax bills by up to $2,100, based on how much they spend on child care.
Yin also noted that details about Trump’s finances may not be included in his personal returns but instead in the returns for his various business entities. And he would eliminate the deduction for state and local taxes, a deduction that both functions as a subsidy from low-tax states to high-tax ones and mostly benefits the affluent. Of course, some will argue that the rich should be double-taxed, and I’m guessing this recommendation will meet with substantial resistance as the debate does ahead. During the campaign, Trump said that families with stay-at-home moms would benefit equally from this tax relief. “But not his taxes, unfortunately”, said Rep. Joe Crowely, the House Democratic caucus chairman.
Much of Trump’s income from his various businesses are taxed as “pass-through” corporations, a category that requires owners under current rules to pay individual tax rates as high as 39.6 percent. Those owners are sole proprietors, partners or shareholders in what are called S corporations, or pass-through entities, which under the tax laws are meant to be small or mid-sized companies.
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. The White House will need to work with Congress on the final plan, which could look very different if lawmakers push back against some of the proposed changes. President Trump’s advisors offered few details about the plan, insisting the announcement was just a “broad-brush overview”.
“We’ve been briefed on what they’re going to do and it’s basically along exactly the same lines that we want to go, so we see this as progress being made”, Ryan said. How we move in that direction is now up to Congress.
Democrats were much harsher in their appraisal.
For individuals and families, Trump’s plan more closely resembles a blueprint released by House Republicans a year ago. The Trump administration wants to cut this down to three: 10 percent, 25 percent and 35 percent.
Witkoff said Trump’s major goal was to drive a stronger economy, not enhance his own financial standing. It could particularly hurt regions like Long Island, where taxpayers depend on itemized deductions to lower their tax burdens. But we don’t know the income levels for those brackets, so we have no idea how that would affect individual taxpayers.
Of the overall sample group, 250 companies paid less than the 15 percent tax rate that Trump proposes; 178 paid less than 10 percent and 43 companies paid less than 1 percent.