President Donald Trump secured the oval office. Now, it is time for us to take a closer look at the tax plan he’s proposing. Will it affect the American people? Will it change the way we live our daily lives? Let’s find out!
Trump’s original tax plan would have made an impact on nearly everyone. According to an analyst from the Tax Foundation, it is hard to imagine that someone will be paying more or the same in taxes with Trump as the president. Because of the widespread criticism Pres. Trump received during and after the campaign season, he made a revision to his original proposal.
Trump’s Proposed Tax Plan: A Preview
Below are some of the things that will be affected by the newly revised tax plan of the President including what it would mean to such areas:
Income-Tax Rates
The current administration wants to make a couple of changes to income taxes. The President promises the lowest tax rates ever since the World War II. He will also shrink tax brackets from seven to three. In an interview, Greenberg told The DCNF that the latest tax plan has a $30,000 standard deduction for married households. Also, it calls for three brackets which will be 12%, 25%, and 33%.
As a result of the income-tax rate changes, households, no matter which brackets they belong to, will be able to see a decrease in taxes. High-income households will receive the largest cut from the revised tax plan.
The TCP or Tax Policy Center, has a different opinion regarding the President’s proposed changes. The TPC reported that the tax plan will give undue advantage to America’s wealthiest. They also added in a statement that those with incomes that are over $3.7 million will experience a tax cut of not less than $1.3 million this year, which is nearly 19% of the after-tax income. As for middle-income households, they will be receiving an average of $2,700 for tax cut or 4.9% of the after-tax income.
The TPC went on by saying that those making $700,000 or more a year will be able to receive almost half of the benefits that are associated with Trump’s tax plan. Yet, the administration said it will do its best to ensure no undue advantage or influence is given to anyone.
Deductions
The President will make it harder for American citizens to benefit from deductions, as he proposed to raise the current deduction limit. With Trump’s tax plan, the standard deduction will be increased to $30,000 for joint filers. For the single filers, the new standard deduction will be at $15,000.
The Industries Most Affected
Trump’s tax plan intends to offer manufacturing companies with the choice to deducting their capital expenses in exchange for their capability of deducting net interest payments. The President also proposed a tempting one-time tax option for domestic businesses that have invested trillions of dollars overseas, so they will be forced to put their capital back to the country.
