Some hate him, some love him but Donald J. Trump is here to stay for a few more years during his term. Even if you don’t favor him, Trump’s tax plan could potentially change the lives of over 75 million households in America for the better. The tax plan has four goals which are:
- Tax relief for middle class citizens which increases after-tax wages and keeps more money in your pocket.
- Simplifying taxes so the process is less of a headache for everyone and people can keep more money.
- Grow the economy by discouraging corporate inversions and creating jobs.
- Not to add to the countries which is already too much.
Trump Tax Plan Details
This is what American’s can expect once the tax plan is fully in place:
- If you are single and earn less than $25,000 annually or you’re married/jointly earn less than $50,000,
you will not owe any income tax. This results in approximately 75 million households being removed from income tax rolls. Those who owe income taxes will save approximately $1,000 each.
- There will be a simpler tax code only including four brackets: 0%, 10%, 20% and 25% instead of the current seven in place. The new Trump tax code will end eliminating the marriage penalty and the
Alternative Minimum Tax while providing the lowest tax rate in decades.
- All businesses including Fortune 500 companies, freelancers entrepreneurs, to small stores will not pay more than 15% of their business income in taxes. This will make America’s tax rate one of the best in the world.
- No families will have to pay the death tax when there is an unfortunate loss of a loved one.
The Trump tax cuts will be achieved through:
- Eliminating and/or reducing the deductions and financial loopholes that the very rich utilize.
- A one-time deemed repatriation of corporate cash held overseas at a significantly discounted
10% tax rate, followed by an end to the deferral of taxes on corporate income earned abroad.
- Eliminating and/or reducing loopholes that corporations use to cater to their interests. This will also be applied to deductions made to the lower business income tax. There will also be a phasing in of a reasonable cap on the deduction of business interest expenses.
- A single repatriation of corporate cash held overseas at a significantly discounted tax rate of 10%. If America is to be more globally competitive, it only makes sense that corporations help this be achieved. Currently U.S.
corporations are estimated to have $2.5 trillion in cash sitting in overseas countries. Some businesses have been doing this as a tax maneuver. The tax plan will promote these businesses bringing their money back home to help the country grow.
Trump Tax Code
America requires a straight-forward, simple and achievable tax plan based on efficient economic principles.
Trump’s plan completes all of that with needed tax relief for hardworking Americans. The pro growth tax reform for the countries businesses and fiscally responsible steps will put America in a much better place. This plan simplifies the tax code by first removing almost 50% of tax payers off of income tax rolls. The number of tax brackets being reduced also makes it much easier for everyone which you can see below.
The earners within the 10% bracket will keep all or most of their current
deductions. Those within the 20% bracket will keep more than half of their current deductions.
The individuals within the 25% bracket will keep fewer deductions. Charitable giving and mortgage
interest deductions will remain unaltered for all of the taxpayers in America. By making the tax code much simpler and cutting every American’s taxes will increase consumer spending, encourage saving/investigating while improving the overall economy.
Well established American brands and new innovate startup companies are opting to leave America directly or through inversions. Democrats are more interested in outlawing this but that is not the best approach. This is merely a symptom to a bigger issue. Ronald Reagan made America have the best corporate tax rate in the industrialized world but this has changed for the worse over time. Under Trump’s tax plan will cut the corporate tax rate to 15% which helps both the small and large businesses in America. Freelancers, sole proprietors, unincorporated and small businesses are unfortunately taxed at the high personal income tax rates right now. This is unacceptable and stifles these entrepreneurs. This tax reform will result in significant GDP growth, an increase in jobs, and an improvement in after-tax wages for workers instead.