Remember when New Coke was introduced in the 80’s? President Trump’s 2017 tax plan is a lot like New Coke, for whatever that’s worth…
Last Wednesday, President Trump unveiled his revised tax plan that he had originally unveiled during his 2016 presidential run. While some of the major bullet points remain the same, there are still a few significant changes that are worth talking about. So let’s break it all down with our 10-Point Expert!
Point 1: Similar to a plan President Donald Trump had released in 2016, during his presidential campaign, his 2017 iteration looks to follow its major beats. The main aspect that the Trump administration tries to emphasize with their tax plan is that it cuts taxes across the board, which theoretically they hope will create jobs and produce trillions in new revenue over the next decade.
Point 2: However, based on the non-partisan Tax Policy Center’s analysis, President Trump’s 2017 tax plan would cost $7.2 trillion while benefiting corporations and America’s wealthiest individuals. Yet unlike most Republican tax plans, very little attention is paid to cutting the national debt.
Point 3: Under current tax law, there are seven tax brackets that most people fall under. However, under President Trump’s new tax plan, he wants to simplify that seven-tiered tax bracket into only three brackets; people paying 10%, 25%, and 35% of their yearly income. As you may have guessed, with a simpler tax bracket comes less money coming in from taxes, which in turn, adds trillions to the national debt.
Point 4: Like in his 2016 economic plan, President Trump’s tax plan wants to increase the standard deduction to married couples ($24,000). Yet he also wants to abolish itemized deductions (with the exception of mortgage interest and charitable deductions), which is very different from his last tax plan, in which he only wanted to cap all deductions.
Point 5: The other huge (‘UGE?) aspect to President Trump’s tax plan comes in how it handles corporate taxes. Under the Trump administration’s tax plan, it would cut the corporate tax (from 35% to 15%) and exempt the income that companies make overseas from being taxed.
Point 6: Sprinkled throughout President Trump’s tax plan are various tax breaks for wealthy individuals which include; the abolishment of the estate/gift tax (a tax on all gifts, awards, or inherited wealth), the elimination on 3.8% surtax on investment income, and abolishment of the Alternative Minimum Tax (a tax on middle to upper-middle class individuals).
Point 7: One of the more unique ideas that President Trump kept from his 2016 tax plan was the “child care tax break.” It essentially is a tax break that would theoretically be used towards child care expenses. While traditionally not a very Republican tax break, it’s a specific point that President Trump had campaigned on (and became quite popular) to many in his base.
Point 8: Another important aspect of the Trump administration’s 2017 tax plan is to make filing for taxes easier. To be honest, we’re not necessarily sure what that exactly means. The administration has said that some ideas of making it easier to file your taxes include eliminating the “head-of-household” filing status. While that would theoretically make filing taxes easier (you would have to file less paperwork), as some have pointed out, it could also potentially increase taxes on the middle-class, which would be a messaging nightmare for the Trump administration!
Point 9: As we said earlier, the people and groups that would benefit most from President Trump’s 2017 tax plan would be wealthy individuals and corporations. Still, Trump’s plan would most definitely cut taxes across the board, meaning that almost everyone would receive some sort of tax break. However, it’s important to realize that his plan would also add trillions more to the national debt each year, which would put Republicans in a very awkward situation with voting for the bill, considering they had criticized the Obama administration for doing the same exact thing.
Point 10: With all that said, clearly President Trump’s 2017 tax plan is still very much a work in progress. We know this because there are more words in this rundown than in President Trump’s actual 2017 tax plan! Clearly the plan creates a basic outline, but the details – which are SUPER IMPORTANT!!! by the way – will most likely be fleshed out if Congress were ever to introduce the bill. But considering the speed of congressional legislation that is coming out of the White House at the moment, that very well could take a while.
(Photo Credits: Google Images)