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Trump Touts 'Giant, Beautiful, Massive' Tax Plan to Manufacturers
December 16 2017, 03:03 | Frederick Owens
Trump’s Tax Plan 12 Reactions You Need to Read
President Donald Trump said Friday that the centerpiece of his plan to help American businesses and workers "thrive, compete and grow" is a "giant, beautiful, massive, the biggest ever in our country, tax cut". While the cut would not be as large as first proposed, it would still lead to very creative tax planning at best and outright evasion at worst, while prompting more companies to adopt this type of business structure to gain the huge benefits.
I can't help but notice that our president is an extremely rich guy who has a lot of pass-through income. "I believe it's unconstitutional", said Governor Andrew Cuomo.
New York's Democratic lawmakers are vowing to fight President Trump's tax overhaul proposal, perhaps even in court. The middle rate of 25% is an amount that now applies to upper-middle income earners, and the top rate of 35% mimics what Bush-era tax rates were before the legislation's sunset provisions took effect during the Obama administration.
The push for tax reform comes after repeated failures on behalf of Republicans to repeal Obamacare, and Treasury Secretary Steven Mnuchin said recently that tax cuts are "on track" to occur by the end of the year. "I pay taxes to my state and local government, you then want to tax me on the taxes that I paid to my state and local government".
Trump announced the plan in Indianapolis and called the plan on Twitter, "This is the right tax cut at the right time". These are known as "pass-through" companies.
Should there be sharp resistance by Republicans who live in states that benefit from the deduction, there's always the possibility that the final bill will simply cap the amount those taxpayers could deduct instead of completely eliminating the deduction.
Law firm partners, like others, would benefit from reducing the top taxable individual rate from 39.6 percent to 35 percent, but Republicans have also suggested another top tax rate that is not yet defined. But the administration hasn't said how.
On the business side, the framework has also caused alarm, since it focuses on lower rates and doesn't specify what benefits would be erased.
Two Republican members on the Senate budget committee -- Sen. "That means more production, more investment, and more jobs", Trump continued. One example: A cluster of LLCs involving the historic Puck Building in Manhattan, a property Kushner's family bought when he was 5. This is the lowest rate since the 1930s!
The pass-through rate applies to non-public businesses, like partnerships and sole proprietorships. But as one moves up the economic ladder, California's more wealthy taxpayers will take a bigger hit. This new plan, on the other hand, seems to be wildly tilted in favor of corporations, at the expense of folks who work for a living.
The richest 10 percent of Americans own almost 94 percent of all stocks, with holdings that average $1.37 million, according to the Federal Reserve. Hence, lowering the company tax rate would provide local owners and shareholders with minimal benefits, since any reduction in company taxes would be offset by a commensurate reduction in imputation credits.
Many Trump administration officials sold their stock after joining the administration.
A bill previously put forward by former Rep. Dave Camp, R-Michigan, would require partnerships with annual revenue of $10 million or more to change to the accrual method of accounting, in which partners are taxed on earned income.
Fourth, it repeals the death tax and Alternative Minimum Tax which forces many Americans to calculate their taxes twice. "We will all succeed and grow together - as one team, one people and one American family". Without that key information, it's impossible to calculate what your taxes will be under the plan and compare them with your current tax liability.
Over the years, the ultra-wealthy have used trusts and other maneuvers to avoid paying estate tax.
McMahon said New York's upper middle class and wealthiest could potentially be the biggest losers under the income tax part of the proposal, because they pay relatively high state and local taxes.