Tax reform is back in focus as the Trump presidency closes in on the 100-day mark and the administration searches for legislative accomplishments.
But clarity on a tax-reform plan seems fleeting. And I don’t have to tell you that actual implementation is a challenge in the face of growing partisanship.
A good place to start the conversation is with a list of tax-reform proposals that have been batted around. They come from a combination of recent statements, tweets and last year’s Republican blueprint on tax reform.
Trump tax-reform proposals include …
- Significantly cutting individual rates.
- Consolidating income-tax brackets from seven to three.
- Doubling the personal exemption for most taxpayers.
- Reducing corporate income taxes from 35% to the 15%-to-20% range.
- Immediate “full expensing” of business investments.
- Reducing taxes on capital gains.
- Reducing rates on income from pass-through businesses.
- Some form of border-adjustment tax.
If enacted, these initiatives could drive GDP growth from 1.6 percent in 2016 toward the postwar average of 3% to 4%.
Front and center, cutting corporate tax rates from 35% to 15%. However, such a goal comes at a cost that’s sure to lift budget deficits.
In fact, the Congressional Joint Committee on Taxation estimates that each percentage-point cut in the tax rate lowers federal revenue by $100 billion in the coming 10 years. In other words, the proposed reduction to 15 percent would cost roughly $2 trillion.
That’s a heck of a lot of cash.
Perhaps that’s why Treasury Secretary Steven Mnuchin and Budget Director Mick Mulvaney are quick to point out that the administration’s tax-reform plan will pay for itself through faster economic growth.
That view is supported by the Tax Foundation’s analysis. The think tank estimates that cutting the corporate tax rate would boost long-term GDP by 2% and that the “full expensing” of corporate investments would contribute another 5%.
And that’s the kind of “go big or go home” reform the Trump administration is selling.
But it’s a tough sell because it’s sure to ruffle feathers among conservative lawmakers who want revenue-neutral reform that doesn’t raise budget deficits.
In comments just last week, President Trump promised massive tax cuts for the middle class and businesses, which he viewed as more important than lost government revenues.
While that’s all fine and dandy, the fact is that deficit-financed tax cuts are going to need Democratic votes. Plus, more-liberal factions are sure to oppose large tax cuts for corporations as well as proposed spending cuts in housing, arts and the environment.
But we need to see some details before the partisan antics heat up on Capitol Hill: The Trump administration is expected to release detailed tax-reform proposals this week and they’re sure to trigger more questions.
I’d like to invite your feedback. In the comment section below, please let me know what kind of proposals you expect to see. Do you think the Trump administration is overpromising? How will the stock market respond?
Good investing,
Mike Burnick
Bill Thomas June 6, 2017
It is better to leave things as they are as this is NOT at all the tax plan that Mr Trump described during is election campaign.
He then talked of a situation in which everyone would pay lower taxes. That will not be the result of this plan:
The lowest paid working family men will be worse off, often much worse off, than before by abolishing his family exemptions.
It’s a great plan for working couples who farm out the care of their children to agencies and baby-sitters but sounds a death knell for working fathers with wives who nurture their own children.
Nobody should be paying more tax under this plan and certainly not the low paid who will be paying for his wealthier countrymens’ tax cuts. I don’t think it is what President Trump intended although, on the other hand, he has not objected to the modified plan.
The proposed one percent rate for the lower paid has also been shelved. The universal exemption is so low that it only allows us to make $1,000 a month before income tax kicks in.
I wish President Trump well on so many things but not this; it will likely lead to resentment, disillusion, further hardship and division among his supporters. If I may add another comment: with regard to Obamacare , the individual mandate should simply be removed to begin with, affording immediate relief. The problem seems to be that Ryan and much of his GOP are holding things up with comprehensive bills that too few people support.
jon catanzaro May 3, 2017
We have not paid for the deficit financed Bush tax cuts years ago that have contributed an estimated 40% to our national debt. Living off of a credit card and improving your living standards off of a credit card may make you look good now but it does not end well. I do not want a tax cut with borrowed money…my and my families borrowed money. One other thing… massive tax cuts to the upper 1/2 of one percent in this country will lead to drastic cuts
to social security and medicare in the very near future…. this is part of the republican playbook and the ultimate goal. I hope people wake up.
JeffreyJ. Hines May 2, 2017
Let’s just do it and get it done already and also get the infrastructure bill done so people can get to work especially the all important electrical grid!
Mary May 2, 2017
“Overpromising” Now there’s a word! It doesn’t look like he will get any of his promises carried out. Build a wall that Mexico will pay for -Yeah, Right! And the beat goes on – you all remember all that stuff he said would be easy. Health care for more people that would be better and much cheaper. “So easy,” he said. But then last week he said the job was more difficult that he thought it would be. And yesterday he demonstrated an appalling lack of knowledge about the Civil War. Where will it end????? One can only hope that Paul Ryan gets his act together and begind impeachment proceedings.
Robert F. Dow, Jr. May 1, 2017
Suggest the medical and catastrophe deductions remain.
Suggest deductions for local and state taxes remain but be capped at $5,000 per year. This is for the middle income and poor.
Note: These would be available for the items above when the standard deduction proposed is not used.
Suggest that there be a fourth tax bracket at 45% for accumulative income, dividends, and interest in excess of $5,000,000.
All dollar amounts should be adjusted based on the change to CPI annually. The CPI should include medical costs and realistic product content costs. For example, the cost of a car should be valued closer to $25K to $30K range than at the current weighting in the index.
JFK lowered taxes and the economy tookoff and taxes increased.
Mike May 1, 2017
Mike from Indiana. What I see is allot of campaign promises that were made; some have had an immediate effect such as on the border even though the wall has not been built yet. The big promise, in regards to Obama Care, t was made that it will be Repealed, and as we see; it immediately became Repeal and Replace. What happen to the Free Market Place for insurance? (So government is getting bigger and stronger under Trump.) Same is happening with tax cuts and reductions. Lorretta Lynch indicated that the Obama administration has built in stops to prevent a conservative administration from changing their liberal progressive rules and laws; as they have placed strategic individuals throughout the bureaucracy (example: look what the judges of the 9th district did when they stopped Trump’s Muslim Immigration into the US.) Progressiveness is the root of Trump’s problem which pervades the Democratic Party and allot of the Republican Party; particularly with those who head up those parties. They want big government, power and money. I see already the newly elected representatives from my district falling in line with the heads of their respective parties. Much different from the promises they made on the campaign trail. I pray and wish Trump the best and that we can make America Great Again.
JAMES A GUDAHL May 1, 2017
Trust me lowering corporate taxes will not lift budget deficits. It will flow
money into a productive arena and flow money out of a centralized
nonproductive arena, resulting in less government spending and tax
money inflow.
JAMES A GUDAHL April 30, 2017
TAX CUTS LEAD TO A INVIGORATED PROGRESS OF INDIVIDUAL FREEDOM TO PRODUCE
PROFIT, WHICH WILL LEAD TO INCREASE GOVERNMENT TAX REVENUE. FREEDOM IS
THE KEY WORD FOR LIFE AND PURSUIT OF HAPPINESS.
Richard L Crist April 29, 2017
At first as you say it would raise our deficits . Let’s say our capital gains tax is cut by 60 %. When all the big money returns to America, a 15% rate of at least 10 times the money will be much more ,not to mention more good paying jobs. Remember Henry Ford?
rickmondale April 29, 2017
My name is Richard Mondale. I am a structurally oriented sort of fellow, so I have been looking at the structure of our Government in an attempt to identify structural problems and methods of repair. What I have been finding is a whole new and different world. As it turns out my childhood on the open planes of Montana was fairly similar to the situation that our Founding Fathers and the Framers of the Constitution found themselves in.
America in the mid eighteenth century was a small population of Englishmen settled on the shore six weeks travel from home with a wild new continent looming behind them, full of dangers and hardships. Money was gold, and was only available from export to the home country so very far across the sea. Anyone who moved inland did so without money, so no one did so. Boston was about 12,000 people. New York was 20,000. The total population of all thirteen colonies was only 2 million. It was them against the universe.
The question in every one’s mind was, “What can help us deal with all of this?” This was a fertile period of thought. They questioned every social norm or convention. They asked, “Is a woman, who is dependent upon the income of her husband, able to think for herself?” “Can a child have an opinion?” Some major works were published during this period. Adam Smith published the Wealth of Nations in 1776, the same year that Jefferson wrote the Declaration of Independence. The works of Montesquieu, Locke, and Burke were not very old at that time. All of these works of social thought were delivered to the colonies along with the latest Paris fashions, fabrics, and flavorings for their foods. They were eagerly consumed.
Out of this cauldron of thought came the conviction that, perhaps, it might be possible to devise a perfect Government, one that could not be seized by any tyrant. I don’t know who gathered all of the ideas together into the Virginia Plan, but it arrived at the Constitutional convention with the separation of powers between three Branches, it incorporated the combination of the three forms of government as recommended by Cicero, the bicameral legislature of England, and it contained the conviction that they were creating an individual to serve us. This new individual would need the same abilities that any individual might need. Those abilities that are common to all individuals are first it must have virtue. Without this Judicial Power it is not likely to survive long. Then it must be able to think so it can plan what it will do. It must then be able to buy what it needs and hire people to do the work. After that the bills have to be paid. All of this was in the rough document out of which the Constitutional Convention crafted our Constitution. Someone did a fabulous service to humanity in collecting and documenting this complex structure.
Was there effort perfect? No, they did make a mistake. This mistake has metastasized into the American Political System. The mistake they made, that gave rise to politicians and the political warfare we are experiencing today, was they thought that choosing a Representative would require a decision.
Voting is a great way to make a decision. 51% wins and 49% loses and is silenced because they lost so take your lose like an adult. We don’t want to hear from you anymore. Those that lose have no seat at the table. But, if you are to be represented you should have a seat at the table, shouldn’t you?
As it turns out, when we Vote, the majority always wins and the minorities always lose. That is not good because we are all members of lots of minorities. You are a member of the minority of people who make movies, you are an immigrant, raised in the English world, you have a saving account, you are married, and you are perceptive. All of these aspects of you make you a minority.
We are all members of the ultimate minority. We are individuals, but we are forced to vote for someone to speak for us. Is this the only way that we can achieve Representative Government? I write today to say no, it is not, and it is causing problems.
What problem could there be caused by politicians? What is the nature of a politician? Well, politicians only get elected if they get more votes than the other guy. You must win to rule, so nothing short of victory is acceptable. It is simple enough to win election. You need to be popular and well funded. Both of these needs can be satisfied for the politician by merely bringing home booty. Just share the immense wealth controlled by the Federal Government. What could go wrong with that? That is what the Framers of the Constitution wanted isn’t it?
The Framers took efforts to incorporate mechanisms that would insure fiscal responsibility and avoid enslavement by tyrannical take over. The mechanism of this was the division of powers. I listed them above. These were apparently put into the Constitution because two of them appear in Article One; Sec 7. The rest are assigned in mass at the beginning of Article Two and Three. The Court gets all Judicial Powers, whatever they are. The Executive gets all Executive Powers, whatever those are. And the Legislature gets the Legislative Power listed herein. Where? Well it is hard to see. Article One; Section 7 consists of three paragraphs. The first starts out saying the Legislature has the power to ‘write bills’ and I assume send them out to the customers, for the purpose of Raising Revenue. It then says that they must clear this with the President by establishing a channel of communication, so the two branches work together. It then says that all Orders Resolutions and Votes should be communicated in the same way.
The separation of powers is stark and complete. The Executive Powers are the Presidents. The Revenue Raising Powers are the Legislature’s. The decision making power of the Vote belongs to Congress. Ordering belongs to the Congress and not to the Commander in Chief. Is that weird or what? The Commander in Chief cannot Order?
Well no. Remember we are talking about one entity that needs the powers that any entity needs, and in order to avoid tyrannical take over those powers are separated between the Branches. In this way no office of Government has all of the required powers. The Executive has everything except Revenue, so he is forced to obey the orders given to him from Congress. Congress has all of the powers needed to think. They are supposed to do the Thinking for the Government of the United States. They then Order the Government of the United States, the Executive, to do it. He is supposed to buy what he needs and hire people to do what he is told to do. The Congress then has the Revenue needed to pay the expenses.
It is like a married couple. The wife buys groceries and household goods to maintain the home, and the husband goes out and earns a paycheck so he can pay the credit cards at the end of the month.
That is a simple system, so that is what our politicians do for us, right? Well no. There is a snarky definition of ‘Politician’ that goes like this, “A politician is someone who will never make a decision until it is no longer of any relevance.” They will not do their job. Additionally they need to bring home the booty. Booty is ‘Spending’. Spending is an Executive Power. The politicians need to control ‘Spending’.
The mechanism by which they achieved that is irrelevant, it must be stopped. It is caused by the inherent nature of politicians, politicians must be eliminated. Our Founding Fathers goofed.
It is not appropriate to advocate removal of some facility without offering some replacement, so this is what I recommend, “The citizen should look inward, into their soul, and define themselves to the Government.” They should then assign their vote in each of these areas. 1 Internal Thought – what do you know that is true? 2 External Efforts – what do you know how to do that someone would be willing to pay you for? 3 Extended Associations – who would you, be willing to die for? 4 What are your Needs?
This would give rise to a Four Chamber Congress that would be able to represent any sort of entity, for instance let’s assume a business network. It has few members but its wealth is relatively large, so it would exist primarily in the second house, which would be denominated in wealth. Let’s look at a biological eco system. It has the right to life, so it would be able to secure its needs in the fourth house. Labor unions have lots of members, and some wealth, so they would be active in the second and third house. Religions and Universities know what is true, so they would populate the first house. Local Governments provide our required sewer pipes and safe neighborhoods, so they would operate in the fourth house.
There are many other things that I could talk about that the Framers of the Constitution included in the document, such as the long list of inventions they listed in Article One; Section 8, but I will stop for now. Elimination of politicians is the critical issue. Please consider assisting us.
Thank you, Richard Mondale
Richard Goodrich April 29, 2017
Everything that has been done since I can remember hasn’t worked long term, so I feel he should go ahead with it.
Frank April 28, 2017
I think we should pursue obtaining moneys from the war debts created by germany, italy, and japan for the harm and destruction they caused, not to mention the countries we saved at our expense. Especially countries that were completely overrun by Germany (germ many) and I will specifically target France whom weve had to defend twice. The same France that opposes
us on so many fronts with their liberal views! Mexico has been bleeding us dry for at least a century. They want open borders for their illegal criminals to come here but what happens to an American who makes a wrong turn and ends up in Mexico? They get thrown in prison and abused. Their all hypocrites who need to be taught a lesson. When the Pres. wants to pull out of N.A.F.T.A., all of a sudden they want to renegotiate the deal so that they can continue to take advantage of us.. I say let them hire tankers to transport their trinkets by way of water. Or pay us to transport them across our land. To hell with the free ride!
Chris Lock April 28, 2017
Trump is not overpromising, and the market will eventually boom. Taxing is basically government thievery to finance itself at the expense of the market. Generally, lowering of taxes will help the market via helping the people and the businesses people work in and create.
p.mckain April 28, 2017
It seems to me that President Donald Trump lives in la la land and could not give a hoot about those American people who do not have the ability to capitalise on the smaller taxation gift he is proposing. In fact they can go to hell, and I predict they will certainly do that. More jobs and opportunities for a better living standard will only be for those companies who are hell bent on making as much money as they can. The average person working for a wage will not benefit from this proposal at all. Those Americans who trust Trump need to uncross their fingers and see what he is doing is just simply not going to work for the average US citizen. I as a keen observer of what is going on in the world fear for you. This path you are being lead down is loaded with more debt and pain for the people of America. I do believe that all Governments have a duty to try to take care of all people, not just some people.
Martin Fox April 27, 2017
The so called Border Adjustment is in fact a consumption tax which
will cause retail prices to increase which means less sales.Eco 101-price rises=sales decline.
The repeal of the inheritance tax on estates over 5 mill. can be eliminated to reduce
the increase on the deficit.
Hank April 27, 2017
“However, such a goal comes at a cost that’s sure to lift budget deficits.
In fact, the Congressional Joint Committee on Taxation estimates that each percentage-point cut in the tax rate lowers federal revenue by $100 billion in the coming 10 years. In other words, the proposed reduction to 15 percent would cost roughly $2 trillion.”
Eliminating debt based money creation and spending the same 2 trillion on infrastructure might accomplish better things. Helicopter money always results in more Inflation. Supply-side economics does not work. The American economy depends on cheap oil and the strength of the Dollar since the US runs a deficit import-export balance of trade. The paradigm is wrong and a flawed system will always fail.
Al McNal April 27, 2017
I’m a fan of simplicity so I like that aspect of Trump’s plan. I also believe any reduction of taxes is a good thing because it lets society spend money where they want rather than having government make spending decisions. Obviously the high taxes on business has produced the situation of businesses leaving the country and hence producing less tax income for the government and less jobs for Americans. Government has be notoriously poor at these economic decisions and given 50 years of liberal spending economics have produced what we are facing right now. A terribly indebted and poorly run government facing a terrible employment situation where we have almost removed the middle class from existence. The government in total has 25% of promised pensions underfunded.
The big question is how to reduce government and let society spend how it wants to without killing the existing economy in the process. Government’s cost is way too high and the ability of its leaders to assess economics has been proven horrible. It’s better to reduce its size drastically and get back to a simpler more stable form of economy where society makes its own spending decisions and government plays a much smaller part.
Helen Neville April 27, 2017
If the corporate tax rate is lowered, there are no guarantees that the extra money would be spent on research and jobs rather than on dividends, bonuses, and higher CEO pay that funnels money to the 1% instead of the struggling 99%.
Lowering taxes now so our children have higher deficits is irresponsible.
Jim M April 27, 2017
The all-knowing Speaker Ryan screwed both the healthcare reform and Trump tax plan when he imposed his “Right Way” diktat on Congress. He mistakenly thought he could operate like they did in the ole days. We will all pay for his inexperience and blunder.
jerry charles April 27, 2017
My impression of the proposed tax cuts is it definitely benefits the wealthy. As to the increasing of the National Debt- some day we will have to face the day of reckoning. There ae too many examples of individuals filing for bankruptcy for us not to consider such a possibility it can happen to a country. Greece could be a good example. As a child in the 1920 depression era I saw what money- or the lack of it- can do. Let’s think of getting out of debt- not deeper into it. Try going to your bank and imagine the front door being locked.
Kevin Beck April 27, 2017
I would prefer the FAIR Tax to replace the current system of taxes.
On a secondary note, I would point out that the idea of making the “new” tax system revenue-neutral is rooted in poor economics and anti-capitalism.
Last year, the Internal Revenue Service collected more in taxes than in any year prior, yet we still had a federal budget deficit. There is no intent to have the income tax revenues to cover government spending. Instead, the modern intent of the income tax is to collect the money into a central pot, and then re-distribute that money to the politically connected. All this is done with the increase in federal debt never being addressed. So the proponents of any new tax system should avoid any discussion about revenue neutrality, and instead focus on the sources of the revenue and its method of collection.
The basic idea should be that a plan for raising revenue should not be restrained by whether the government is going to collect the same amount under a new system as under the old; it should be focused first on preserving the capitalist nature of our national financial system, instead of acting as a means to destroy it.
REL April 27, 2017
If no one pays taxes and you all want no Government why don’t you just move to Samolia…. based on no taxes and no Government that place must be like totally awesome !!!!!!!!!!!!!!!?????????
Allan Artman April 27, 2017
I believe that Trump is trying to do what he feels and believes is best for America! The problem is that the Zlegislators are fighting to not lose their slush funds and keep the Swamp! We need to vote in more true conversatives. I am in favor or Dinakd Trump continuing the fight!
Joe Bruzga April 27, 2017
The devil is in the details. As a resident of a high taxed community in a highly taxed state, the proposed elimination of the state/local tax exemption will be a major issue. It may be enough to force many of us to abandon New York for more tax-friendly destinations and that would adversely effect the economy of this state.
Rich April 27, 2017
Cut the government waste. Reduce our overseas military footprint and foreign aid. Eliminate a few government agencies & departments like “Education” & “Energy”. Reduce corporate & individual tax rates….Great recipe for success in achieving a robust economy & reducing government debt. Government debt shrinks as public tax revenue grows via a growing private economy and excessive government spending is addressed.
Larry Leahy April 27, 2017
Didn’t go far enough in reforming our tax system
John Schaefer April 27, 2017
Business man’s action and politicians are like oil and water!
The swamp slime is very thick and it will not drain quickly! I hope we have enough patience as supporters to wait for results to show. You do not correct a situation like Washington in 100 days. The strategy is to get to 2018 elections and hope for more conservatives to be elected. The fact that the Supreme Court will very likely have more conservatives appointed over time will be an accomplishment to be thankful for.
I am in for a long ride.
emmet solomon April 27, 2017
right now social security distributions are taxfree (if you don’t have other income)
Jim Benning April 26, 2017
Hey Mike,
This is not a CHAT site. Please come forward with info or RECO”s that can direct us in this market.
M Crowley April 26, 2017
You are just commenting on the news. I have not recently heard anything from you about the stock market or gold tendencies. It would be nice to have weekly updates, or at least every 10 days about what’s going on with these markets! I am a real wealth subscriber, and would appreciate some input
G Wede April 26, 2017
Looks like the typical tax reduction for the 1 percenters again with middle class getting a few extra hundred bucks a year
Can they ever just give a really big tax break to the working people of this country who will spend the difference which creates more jobs than anything else
How does eliminating the estate tax which the one percenters pay help the economy or reducing capital gains taxes with the top 10% get
The vast majority of tax reform needs to impact the hundred and eighty million people who are at middle class or below these are the ones that spend the money and we’ll get this economy going not 1% of the population.
5000 extra in a 180000000 people’s wallet in one year would cause an explosion in growth.
A huge cut for the 1 percenters does nothing but increase the gap between the have and the have nots
Robert Schubring April 26, 2017
Canada attracted much investment from US companies, by merely allowing faster depreciation than the US did, for capital equipment.
Why that’s important, is that as technology advances, the tools we buy for a factory, can become obsolete, much faster than we initially guessed they would. If that happens, we’re stuck paying taxes on a machine, that can’t make money in the market, because a newer machine at a competitor’s plant, does the work better and cheaper, and the competitor wins all the work there is to be had because his prices are lower than ours.
The radical solution of Expensing all tools a business buys, puts every business on a level playing field. We simply buy the tool and install it. If it’s still working next year, we pay taxes on the money we make with it. This year, the company who built the tool, pay taxes on the money we paid them…instead of us paying tax on the money we paid for the tool.
A lot of the environmental foot-dragging we see out of businesses whose process or products have a pollution risk, derives from the fact that a pollution-control device, incurs tax liability in future years, EVEN WHEN THE DEVICE DOES NOT PREVENT POLLUTION.
That’s truly an absurd consequence of the tax laws.
Business owners who live near their business, have as much reason as anyone else in the neighborhood, not to want to emit pollution. But when nutty tax laws interfere with our ability to test out devices and processes, our hands are tied.
Back in the 1980’s, AT&T underwent a breakup, and then put itself back together, because these same absurd laws about how to tax the money spent on buying tools, interfered with the buying of new digital technology for transmitting telephone calls. The old analog machines existed. Someone got paid to build them. Then every year for 20 years, AT&T deducted part of the tax it paid on the money it spent buying the machines. The machines were obsolete in 1975 but they were still settling the cost of taxes on the money spent to build the now-obsolete machines.
By breaking the company up into a bunch of competing companies, and enabling some new startup companies to jump into the mix, suddenly these obsolete machines could be sold for what they were now worth…almost zilch…and the IRS had to allow the taxable value to be adjusted to what it actually was. Now that the business model of a telecom firm has completely changed, AT&T reassembled itself.
All that bureaucratic effort of splitting the company up and reassembling it, was money, time, and effort, wasted, just to force the tax bureaucracy to recognize a simple reality: Worn-out tools are worth nothing except the scrap value of recycling the valuable metals in them to make other products.
Expensing tools the first year, is an idea whose time has come.
Edward Zampella April 26, 2017
I believe that taxes should be reduced to all wage earners; but not at this time. Let’s get the country back on its feet and back in its rightful position in the world economy by putting a greater effort into improving our situation. If we allow our country to go bankrupt it will take a greater effort to regain our status. So let’s all show the world that as Americans we can do it by all working together to accomplish this goal.
Rich M. April 26, 2017
It seems logical that the success of a massive corporate tax cut plan would be contingent upon how corporations use their new-found money. In the past, many corporations have retained large amounts of cash, or turned newfound profits into large bonuses, increased salaries, stock incentive programs and increased dividends for executives within the firm.
Investments in technology are showing that the elimination of manual labor is accelerating, which is inevitable. However, unless the middle class can afford to buy products and services that corporations are producing, the tax reform plan will not have economic sustainability.
If Mr. Trump’s promise two bring jobs and manufacturing back to America is sincere, corporations will need to look at cost reduction strategies to make their products and services more attractive to the majority of Americans. At present, many corporations are choosing to increase the number of part time workers with few, or no benefits, resulting in a reduction of disposable cash to many would be customers of goods ad services. From my view point, I do not see a way that Mr. Trump could provide the type of corporate tax cuts he is promising in conjunction with developing a stronger financial footing for the middle class. Looking at his entire strategy, it appears that a middle-class tax cut would be minimal at best, while many other components comprising the cost of living, such as healthcare, energy, food and interest rates, will all continue to rise, offsetting any tax breaks middle class Americans may actually enjoy.
Finally, unless the dollar weakens significantly. Selling American made products beyond our shores will be difficult, especially if tariffs are increased on foreign imports.
The long term results of this plan do not appear to be promising for most Americans. However, the increased availability of cash made available to already cash rich corporations, should benefit the rich very nicely.
Bobo May 24, 2018
Finally someone who can see the truth. I was starting to think people have forgotten how and who built the greatest country this world has seen. (Middle Class)
david April 26, 2017
“deficit-financed tax cuts”? That is incorrect.
Reducing tax rates always results in increased revenues to the U.S. Treasury.
ELISSA JUNG April 26, 2017
RUNNING A GOVERNMENT IS NO DIFFERENT THAN RUNNING A HOUSE. IF THE ROOF IS LEAKING AND IT COSTED BIG BUCKS, YOU DECIDE NOT TO SPEND THE DOLLARS…GO INTO DEBT. DOWN THE ROAD NOT ONLY DOES THE ROOF LEAK MORE BUT THE RAFTERS ROT AND YOU HAVE UNDER MINED THE WHOLE STRUCTURE. NOW THAT’S A MUCH BIGGER NUT TO CRACK .ALSO I MIGHT ADD IF MONEY IS TIGHT DO NOT TAKE ANYTHING IN THAT ‘EATS’! IF YOU LOOK BEYOND YOUR NOSE YOU WILL SEE THE ‘COMPLEX GOBBLY DE GOOK” COMPLEX IS REALLY VERY SIMPLEY TO SOLVED.
J April 26, 2017
Tax cuts give people and business more money to spend especially for individuals to increase GDP and businesses to be more profitable and expand as the people are able to spend more which increases production, employment and personal spending which in turn increases government income.
Bob April 26, 2017
As a conservative American country boy, I want simple and in my view, having a tax reform sounds pretty good as the current tax structure is way too complex and has way too many loop holes. As one of the politicians asserted, being able to file our taxes on a postcard would be great. So what I know of the current proposal, increasing the standard deduction to twice the current and removing the deductions for charitable contributions, mortgage interest, etc seems fair and simplifies the filing process. Let the goal of getting it reformed so that we can file our taxes on a postcard be the motivation that will truly make America great.
margaret ashton April 26, 2017
Trump’s plan has been tried by others and has worked.
william williams April 27, 2017
Who tried it??? Doesn’t Europe use a value added tax instead of an income tax?
Eagle495 April 26, 2017
Reagan said the same thing, yet the deficit just kept going up…. Nothing different here. Unless taxes, especially on the Ultra Wealthy go up or spending is cut drastically, our deficit will continue to build. Under the GOP, since the 1980’s the Middle Class (The great economic engine for America) has been crushed and with that the economy has been stifled…. Until Middle Class is looked after, the deficit will continue to increase…
James Bunyan April 26, 2017
It is about time that more cash was released to the private sector. The public sector has an insatiable appetite for other peoples money. That contributes little or nothing to growth. They have had their shot, with little tangible result. Keep doing the same thing, you will keep getting the same result.
Mark April 26, 2017
They should get rid of the AMT too. What a nightmare!
ESTEVE ANDRE April 26, 2017
1. In 2015 the average corporation (who did actually paid taxes) actually PAID a 19.4% tax rate after all the deductions that the tax code allowed. So Trump is only giving a 4.6% relief….In addition, almost 85% of all corporations in American don’t pay any taxes as it is.
2. If you repeal the estate tax then in 10 years the country will be run by the Oligarchs just like they do in Russia currently. This is what it was like in the late 1800’s and early 1900’s in America (just ask the Robber Barons) before we had income taxes and estate taxes. If you don’t learn from history, you will be condemned to repeat it.
3. And the 20 trillion dollar deficit (currently before these tax cuts) will be paid HOW? It is all becoming Monopoly money. The game is on. Sometime in the future Japan, Europe, China and the US will forgive all the borrowing and start all over (/Brenton Woods anyone?)
Barbara Simington April 26, 2017
no tax is the best tax!
Get rid of it all. No IRS.
Then we all will survive better.
Thomas April 26, 2017
the only people who will benefit from tax reform will be the wealthy.. they are the people who
generally benefit from tax reform. that is why we must vote out these self serving politicians
Charles April 28, 2017
I would not expect the 49% of the population who do not pay any income tax to benefit. I would also expect that of the other 51% who do, a great number of them will see their taxes increase if there only two brackets as the discussed 20% will apply to a lower taxable amount who are only paying 15% now.
You can be sure that your purchasing power is going to be reduced either by higher taxes or higher prices with no offsetting increase in real wages or passive income.
Mike April 26, 2017
“tax-reform plan will pay for itself through faster economic growth.” I heard this argument 36 years and 19 trillion dollars in debt ago. As everyone will remember, when asked if the proposed tax cuts would lead to greater deficits Reagan’s first chief economic adviser, Murray Weidenbaum answered yes. This was the last time a Republican actually spoke the truth about taxes. The simple facts are the National Debt tripled under Reagan, George H. W. Bush and Bill Clinton raised taxes on the wealthy and the deficits went to zero. George W. Bush cut taxes and the deficit exploded. Obama did not substantially reverse the cuts and the deficit has remained out of control. So go ahead and live in fantasy land and when the National Debt reaches 147 trillion dollars blame the poor or the illegals or the wet dog behind the tree but don’t blame the tax cuts that transfer all of the increased economic gains to 400 families.
William L Pettingill April 27, 2017
Have you forgotten that as part of the Reagan’s tax cuts, Congress agreed to large cuts in spending and then they reneged and didn’t do it. Hence a much larger deficit.
Mike April 28, 2017
Have you forgotten that for the first 6 years of Reagan’s tenure the Senate was controlled by Republicans? Have you forgotten that as part of Reagan’s military build up he increased spending to the point where budget director David Stockman resigned in protest and Secretary of Defense Caspar Weinberger was nicknamed “Secretary of Spending”? Hence a much larger deficit. Have you forgotten that in the preceding 4 years under much maligned Carter that the TOTAL deficit was less than ANY one year under Reagan?
Bob April 26, 2017
If corporations back trillion of dollars of over seas money and get taxed on it, wouldn’t that cover the first year deficit?
Joe April 26, 2017
The Republicans don’t need the help of the Democrats, aka marxists. They have majorities in both houses. The big question is, will the corporatist Republicans go along with this, or team up with the marxists to oppose these proposals?
The Republicans could ram this through, just as the marxists did in 2010 with Obamacare. Will they move this forward? Or will they do nothing?
Mary DeHoff May 2, 2017
Even the Republlicans are fractured. It is like there are three parties in the House and nobody really has a majority.
michael13 April 26, 2017
Yeah, cutting taxes to the bone worked really great for Kansas. Not.
Del Smith April 26, 2017
I have not yet seen what President Trumps plan would do with respect to capital gains and depreciation recapture on rental property. This is something that would impact anyone who may be thinking of selling depreciated property. Is the 1031 carry forward program still in effect and at what recapture rate will it be under the Trump tax proposal. I am waiting to find out before I make any moves, as I am sure a lot of others are. Any insight?
johnfromojai April 26, 2017
Universal healthcare is more important than bombs and billionaires.
Fred April 26, 2017
Where are these people coming from that lowering the tax rate hurts revenue? Did they forget that when Reagan lowered the tax rate from a preposterous 70% to a still too high 35.5%, federal revenue from income tax almost doubled from about 500 $B to over 900 $B? Then again fi these people know what they were about, things wouldn’t be as bad as they are.
Mike April 28, 2017
As you will remember, tax revenue fell the first two years after the cuts. It only began to rise after Reagan RAISED the Social Security tax to pay for today’s retirees. There is 2.8 trillion dollars in that surplus.
Jim Thinnes April 26, 2017
Is Martin Weiss still connected to this operation? Except hearing his condolences for Larry I haven’t heard a word in a very long time.
Jerome Ade April 26, 2017
Your attitude infers that you do not like Trump.
I am a big Trump fan.
Since our current tax system and economy need to be redone, give the Trump plan a try. Nothing can get worse than what we inherited form the trader Oboma.