Trump tax plan leaves Congress, Ryan with heavy lift

President Donald Trump released on Wednesday broad proposals for a tax reform plan that would slash taxes on businesses, double the standard income tax deduction for individuals and joint filers, and encourage companies to bring back money from overseas by instituting a lower repatriation tax.

What are the objective for individual taxpayer reform?

Moreover, it is simply false to say, as Treasury Secretary Steve Mnuchin does, that the tax cut will “pay for itself”. When asked about it at the roll-out briefing, Director of the National Economic Council Gary Cohn called such information a “micro-detail”. The 40% tax now applies to a $5.5 million inheritance for individuals and $11 million for married couples.

All tax deductions except for the mortgage and charitable contribution deductions would be eliminated.

Under that scenario, taxpayers would no longer be able to write off expenses now commonly deducted, such as state and local property taxes and medical expenses. Moreover, “If they hold their corporation until they die, they could transfer their assets tax-free to heirs, who could continue to accumulate lightly-taxed profits by simply keeping the assets in the corporation”.

The government’s budget deficit could explode under the plan, offsetting numerous benefits for the economy, economists say.

“The proposed tax deductions will definitely spur the economy”, Howard Schwartz, CEO/founder of distributorship HDS (asi/216807), told Counselor.

Ending state and local tax deductions would have a significant impact on taxpayers who itemize their taxes. Under this latest proposal, that would be replaced with a $24,000 standard deduction and no personal exemptions.

Fiscal conservatives, for instance, could take issue with the fact that Trump is proposing massive federal revenue cuts without providing a plan to keep the deficit from ballooning.

That description, however, is sharply at odds with what details the administration has put forward thus far.

It’s also unclear at what income levels the new proposed tax rates would kick in. The plan says simply, “Eliminate tax breaks for special interests”. Businesses will thus be reluctant to make big, long-term investments based on the lower taxes, given the likelihood they aren’t here to stay.

How does the plan affect individual businesses?

“Although the rate is coming down on the top end of 35 percent, there will be many, many deductions gone”. Instead, it gives massive tax relief to – I hope you’re sitting down – corporations and the rich.

Don’t fall for Trump’s corporate tax giveaway.

Other states made changes, too, in ways that allowed them to capture some additional revenue. It would be closer to 100 percent under the Trump plan.

Trump’s plan is supply-side economics on steroids, and will fail even more miserably.

The Wall Street Journal offers a cautionary tone to the irrational exuberance many stock investors have experienced over Trump’s tax plan.

How would this plan affect the deficit?

In its editorial titled “President Trump’s Laughable Plan to Cut His Own Taxes“, The NYT claims the tax plan was created exclusively to benefit Trump and other rich captains of industry.

The No. 2 Democrat in the Senate, Dick Durbin, attacked the tax proposal and the fact Trump, a wealthy NY real estate developer, had declined to make public his personal tax returns.

I also don’t like that the Trump plan will likely benefit high-income and wealthy taxpayers the most.

Trump’s laundry list of tax cuts would reduce revenues for the US government, which is already running a deficit and deeply in debt.

What are the chances that this plan is fully implemented? Anyone who supports this mess automatically forfeits the right to be a deficit scold ever again.

During the April 26 edition of ABC’s World News Tonight, correspondent Jonathan Karl hit the Trump administration for releasing a tax plan that was just “a single page, double-spaced, with few specifics” and for continuing to refuse to release the president’s tax returns, which could inform the public as to how much the Trump family stands to materially benefit from the overhaul.