wnol.info October 19 2017

Treasury Secretary can't guarantee middle class wouldn't pay more under tax plan

October 19 2017, 11:41 | Alonzo Simpson

Treasury Secretary can't guarantee middle class wouldn't pay more under tax plan

Treasury Secretary can't guarantee middle class wouldn't pay more under tax plan

President Donald Trump moved Wednesday to fulfill one of his key campaign promises, outlining a dramatic plan to slash taxes for almost all individuals and businesses and give the tax code its biggest overhaul in three decades.

President Trump's tax reform plan will benefit most US households and make filing taxes simpler but it will provide the biggest windfall to the wealthy, experts say.

President Donald Trump reaches out to embrace his family after his inauguration on January 20, 2017 in Washington, D.C.

Also during the campaign, Trump proposed getting rid of the "head of household" filing status, which is mainly used by single parents.

The president also favors lowers rates and less tax brackets for individuals.

If the plan is not deficit neutral beyond the 10-year time horizon, Trump will need to convince some Senate Democrats to vote for the bill.

Ness says the plan does not yet specify income levels, but believes people with high incomes would benefit most. That's because most lower-income taxpayers take the standard deduction, and that's being doubled. The administration plans to provide tax relief for families with child care expenses, too, although the specifics have yet to be included.

Mnuchin also confirmed that the infrastructure spending will not be included in the tax plan.

Trump's plan was applauded by many small-business groups and Republicans, who say it would remedy an inequity in the current tax code, which taxes corporations at a maximum rate of 35 percent, while subjecting much pass-through business income to the 39.6 percent individual rate. But there's no detail on which incomes fall under each bracket.

"This tax cut is a massive threat to the incomes of Australian workers".

The alternative minimum tax (AMT) will be repealed. Because of that, he instead paid $38 million. Lower rates for individuals and families will allow them to keep more of their hard-earned money and empower them to invest more in their future.

By dropping down the corporate tax rate below the top personal tax rates, the plan will open up a troubling incentive. "Definitely not enough detail", Kyle Pomerleau, Director of Federal Projects at the Tax Foundation tweeted. The fact is it affects very few estates. This year, about 5,200 estates will pay the tax, according to the Tax Policy Center.

Alan Viard, resident scholar at the American Enterprise Institute, says administration officials will nearly certainly ensure that no one pays a higher rate on the same income.

To qualify, business owners, such as developers, set up limited liability companies to pay them, thus avoiding higher income tax rates.

Rich people, including Trump, tend to report a lot of business income, Williams said. To others, President Trump's plan to end the federal deduction for state and local taxes would eliminate a costly perk for the wealthy.

The White House proposal would cut many deductions - including those for state and local taxes - but retain others, such as the deductions for mortgage interest and charitable donations.

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