Donald Trump's tax cut won't be the biggest in United States history

Share

So far, the new Republican tax cut plan is getting pretty good reviews, and it avoided a lot of the potential landmines that had conservatives and some Republican lawmakers grumbling before the unveiling.

President Donald Trump and the House GOP unveiled a massive tax-reform bill on Thursday. "It's the challenge of a generation".

The Republican tax legislation released on Thursday didn't give President Donald Trump's daughter everything she wanted either.

The plan would cut rates for corporations and individuals, while offsetting those cuts with the elimination of various deductions. On top of that, companies get some new tax breaks to help lower their bills such as allowing businesses to deduct all the costs of purchasing new equipment, as well as a special low rate on any money they bring back to the United States from low-tax countries such as Ireland. Again, more corporate investment will mean more U.S. jobs and higher paychecks.

That tax brought in $18 billion a year ago alone. "It is that simple", said Jamie Dimon, chairman and chief executive officer of JPMorgan Chase & Co. and chairman of the Business Roundtable The Roundtable is a powerful lobbying group for the largest US companies, including many with overseas cash.

"In 2005, the one year of Trump's taxes we've seen, the Alternative Minimum Tax cost him an extra $31 million", the organization tweeted. At the moment, only estates worth over $4.49 million faced the estate tax.

As the below graphic shows, these high-tax states receive a huge portion of the total property tax benefits, while low-tax states like Tennessee and IN receive very little from the deduction.

The GOP bill would also allow taxpayers to write off up to $10,000 in state and local property taxes.

Trump said at the White House this week that he wanted Congress to pass the tax overhaul by the U.S. Thanksgiving holiday on November 23.

-Hedge funds, doctors and lawyers: Many wealthy Americans hedge fund managers, doctors, lawyers and consultants will get a sizable discount on their taxes.

The provision is part of a tax bill that contains sweeping changes for business and individual taxes, pitched by Republicans and the White House as a way to boost job creation and the USA economy.

More news: Two die in Hwy. 17 crash west of Shabaqua

A new tax rate for so-called pass through businesses, those not incorporated, is set at 25 percent. He also says a tax cut is the best way to increase productivity.

The bill also defines what an "unborn" child is.

Tax deductions for student loan interest are cut.

"We are going to make this economy boom", said Cathy McMorris Rodgers, chairwoman of the House Republican Conference.

Senate Leader John Flanagan on Wednesday singled out a provision in the tax overhaul proposal that would end a popular federal deduction for state and local taxes.

"Eliminating or nullifying the tax incentives for homeownership puts home values and middle-class homeowners at risk, and from a cursory examination, this legislation appears to do just that", William E. Brown, president of the National Association of Realtors (NAR), said in a statement.

The National Federation of Independent Business, the influential small business lobby, also came out against the bill.

Pass through entities now pay the same rates as individuals and Republicans said they would establish "strong safeguards" to stop individuals from gaming the system.

The 12 percent rate is "borderline of being business unfriendly", said Steven Englander, head of research and strategy at Rafiki Capital Management.

But it raises the threshold for that top bracket to $1mn for married couples, from the current $470,700 - meaning a major tax break for people earning half a million dollars or more annually.

If removing the property tax deduction (and other state and local tax deductions) would create a big burden for taxpayers in high-tax states, that's a problem for state governments to address by lowering their tax burdens.

Share