Why NYers could lose under Trump tax plan

Rosalie Stanley
October 3, 2017

It's also worth noting that cost-of-living differentials in many high-income, high-tax areas mean the definition of "middle class" includes a lot more people with incomes that would be upscale in MS or even Texas.

Senate Finance Chairman Orrin Hatch, Republican of Utah, said the center was trying to "invent numbers" and "reverse-engineer a completed tax plan from what's in the framework". The new plan for reform includes an overhaul that makes the tax code simpler, fairer, and flatter. If you're in the middle class it's a mixed bag at best.

Multiplying the amount of small business and farm-based estate taxpayers who are living today by deaths over the next 70 years would still just result in 5,600 small businesses or farms potentially relieved of the tax - vastly smaller than Trump's "millions".

The plan, very similar to what he proposed during his campaign and earlier this year, calls for a zero tax bracket by doubling the standard deduction and reducing the number of tax brackets from seven to three.

President Trump chose to come to IN this week to unveil his new tax plan, which he has called "the biggest tax cut IN American history". That was more than either the federal mortgage interest payment deduction (&69.5 billion) or the charitable giving deduction ($54.4 billion). But for those that are still a little hazy on what exactly it will do, experts are also still unsure.

First, there's the elimination of the alternative minimum tax, or AMT.

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Lowering corporate rates is a good place to start.

Kennedy proposed cutting the top tax rate from an astonishing 91 percent to 65 per cent. That is up from the original proposal in April of 15 per cent, but far lower than the top tax rates now faced by high-income earners of 39.6 per cent.

The plan will provide "the lowest top marginal income tax rate for small and medium-sized businesses in more than 80 years". It would also allow companies to write off capital expenditures for five years.

Brings Profits Back HomeThe framework brings home profits by imposing a one-time, low tax rate on wealth that has already accumulated overseas so there is no tax incentive to keeping the money offshore. These different schedules are more a function of political influence rather than economic efficiency. "This can be done through incentivizing the manufacturing sector and small business growth, as well as lowering rates on businesses and investments". In his speech to an IN crowd, he said: "I'm doing the right thing, and it's not good for me".

In fact, the United States is the only major economy that uses a worldwide tax system instead of a territorial system. In regards to the 100 percent exemption for dividends, the framework suggests a transition rule, under which a one-time tax would apply to existing accumulated untaxed foreign earnings. Putting American companies on equal footing with their competitors is an important improvement.

President Trump has delivered a forward-looking tax reform framework that will let hard working Americans keep more of their money, simplify our system, end carve outs for special interests, and will help make our businesses competitive overseas. But the road to implementation will be challenging. However, the plans for closing loopholes and carve-outs will no doubt trigger alarm bells across Washington, creating formidable opposition bent on derailing reform and protecting the status quo. Look for Congress to be under pressure to make expensing permanent. The stakes are high and the benefits for taxpayers and the economy are real.

Other reports by Guamnewswatch

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