Donald Trump’s Tax Plan
Have you ever paid close attention to Donald Trump’s New and Improved Tax Plan? Well, turns out, he has made quite a lot of changes but, it seems that we actually know less about it now (2 months away from elections) compared to one year ago when this change was proposed. Looking closer at Trump’s campaign site, his 4 page tax code document has actually been reduced to a insignificant 4 paragraph statement.
In reviewing Trump’s original tax plan, it stated that everyone would benefit from a cut in taxes, especially the rich, who will benefit the most and this will cost over $10 trillion over a period of 10 years.
In May of this year, Donald Trump was supposed to review the tax plan to reduce cost to citizens, but after Trump’s original tax cut which proposed rates such as 10%, 20%, 25%, the rate have now gone up to 12%, 25% and 33%. This overall increase, compared to his original plan, is also not specified to any particular income group.
Donald Trump’s Tax plan also proposed an overall tax cut where one tax plan was applied to all individuals to avoid favored groups in American society and also to simplify the process. Great interest was also shown in reducing the business taxes to 15%.
In this past week, the Trump Campaign also publicized its intentions to propose tax breaks for child care costs to help parents.
Although all this information is quite helpful, there is still a lot to know about. Some of it entails:
1) Is there a reduction in Trump’s Standard Deduction?
For Trump’s original standard deduction, it has been raised to $25,000 and $50,000 for individuals and couples respectively. This was a significant change, beneficially, for low- income families and middle-class families and it is the most expensive aspect of Trump’s tax plan.
2) How much will the rich have to pay under Trump’s plan?
Great news for them as they will have less tax to pay compared to today’s amounts but how much less compared to his original plan?
3) What about capital gains and dividends?
Donald Trump’s original tax plan would have kept the regular rates of 0%, 15% and 20% on the capital gains and dividends for a long term period.
4) What about itemized deductions?
Trump had previously stated that he would limit the deductions but no specifications were made as to which deductions will be limited. However, Donald Trump’s original plan maintained the mortgage interest deduction and pursued tax breaks for charity organizations.