Trump reportedly plans to raise bottom tax rate to offset tax cuts for wealthy

[applegrove]

REBEKAH ENTRALGO at Think Progress

https://thinkprogress.org/trump-reportedly-to-plans-to-raise-bottom-tax-rate-to-offset-tax-cuts-for-wealthy-55f07ec0b470/

"SNIP.........


With multiple failed attempts at repealing and replacing the Affordable Care Act, all eyes are on Republicans as they prepare to pass major tax reform measures that would effectively provide a hefty tax cut to the top tax bracket while lowering the corporate tax rate to around 20 percent from 35 percent.

As President Donald Trump prepares to announce his plan to “cut taxes tremendously for the middle-class” tomorrow, details about the tax reform plan, which was largely constructed in secrecy by former Goldman Sachs employees now in the administration, are beginning to make their way to the public. On Tuesday, Axios reported Republicans have agreed on a plan to raise the bottom tax rate from 10 percent to 12 percent, while also doubling the standard deduction.

This increase in the bottom tax rate is one of the ways the Trump administration is planning on paying for the massive tax cut for the rich. Trump’s plan is expected to slash the top individual tax rate from 39.5 percent to 35 percent.

“[Republicans] are clearly looking for ways to offset the enormous tax cuts their plan gives to the wealthy and corporations. Just the tax cuts that have been reported would cost $5 trillion,” said Seth Hanlon, senior fellow specializing in tax policy at the Center For American Progress. (Disclosure: ThinkProgress is an editorially independent site housed at the Center for American Progress Action Fund, the sister organization of the Center for American Progress.)


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[exboyfil]

1. The first $34K is exempt from federal taxes

For a married couple.

[Johnny2X2X]

7. Not true

$24K, not $34K. $12 K for individuals. So the higher rate is off set by this though. They're getting rid of some deductions too. It could be a wash or a slight gain for low income families.

For lower middle class and middle class it all depends on where the tax brackets fall (which they haven't released yet). If the 12% bracket goes up to $50K this could be really good for working families. If it only goes up to $30K, this could be really bad for working families.

The corporate rate only works if you eliminate almost all of the loopholes and make the theoretical rate close to equal to the actual rate paid.

The rich do not need a stinking tax break. The elimination of the Estate tax is terrible for our Democracy.

[exboyfil]

8. You are right

I didn't know they were rolling the exemptions into the deduction (sneaky little devils).

Agree with you on the estate in part. I could handle no change in basis and capital gains taxes due at death. I would even throw in a CPI adjustment. I don't know the implications, but even estates in the $1M+ range should also pay at death.

I am thinking about doing an essay on the Jewish jubilee commanded in the Bible. They understood what wealth concentration over time would imply for their society.

[Johnny2X2X]

10. The plan is a Trojan Horse IMO

It actually doesn't sound all that cruel at first glance, but that can't be. This group of miscreants have done nothing but try to make the lives of the poor and middle class miserable, by the time this law solidifies it will likely totally screw over the poor and working class. Nothing they have done suggests they are changing.

Personally, I'd like to see all income under $30K for individuals exempt, $60K for married couples. If Reps then want a flatter tax after that, that would be a good trade off. Corporations right now barely pay taxes, eliminating the loopholes and lowering the rate could raise revenues and promote business.

The estate tax needs to be increased, the founding fathers weren't sure they wanted inherited wealth at all in this country. a graduated estate tax would be best for the country. Say 0% on anything under $1.M all the way up to 80% on anything over $100M.

[HuskyOffset]

11. and investment income needs to be taxed the same as labor income

Sick of ultra-wealthy assholes paying only 15% on their income.

[KT2000]

2. lower tax rates in Sweden

are 28%. For that they get healthcare, education, senior assisted living and more.

[Merlot]

5. "healthcare, education, senior assisted living and more"

Americans don't get what we pay for in taxes. We get military spending and handouts to corporations instead of the things that we should be getting with our taxes like infrastructure, health care, better schools, etc.

[KT2000]

9. Also, they do not live in fear

of losing everything to healthcare and senior care like Americans.

[Hoyt]

3. Supposedly, they are doubling the standard deduction which might offset increase in rate.

We'll see.

[karynnj]

6. A lot then depends on where you live

Consider a middle class family in New Jersey where state taxes (income and property taxes) are high and homes are expensive. A family with kids will lose the exemptions and it is very possible that they previously itemized getting as much or close to the new standard deduction. At this point there is too much undefined, but it already seems that many people who most would consider middle class will pay more.

Here is one attempt to analyze some major impacts
https://www.nbcnews.com/politics/donald-trump/tax-plan-impact-mystery-middle-class-not-trump-n805331

What is clear is who the biggest beneficiaries are - Paul Krugman linked to an analysis that estimates that a full 30 percent of the gains will go to the top .1%; 50% will go to the top 1%.

Link to tweet

With absolutely no other information, it seems very likely that this will either explode the deficit -- and they will be back demanding all social welfare programs be cut because of the deficit OR in aggregate, the bottom 99% will be paying more.

Just what we needed - a tax plan to increase income inequality! (I hope is not needed, but added just in case.)

[dawg]

13. But they are eliminating the personal exemptions.

So a family with more than two children might be hard-pressed not to see a tax *increase*.

Or, consider a married couple who normally has around $24,000 in itemized deductions. Now, they get a $24,000 standard deduction instead, plus they lose the benefit of their personal exemptions and their bottom tax rate is raised from 10% to 12%. Yay!

[Hoyt]

15. Yes, I saw that in "details" released other day. When folks catch on, they are going to yell. Thanks

[Angry Dragon]

4. One has to remember that the rich get all the tax rates as they earn (steal) more

[randr]

12. As if the lsos knows anything at all about this proposal

The illiterate lsos will support whatever his fat cat contributors hand him, or not, or maybe we'll have to see.

[dawg]

14. As a head of household filer who currently has *just* enough deductions to itemize ...

I'm in danger of seeing a pretty significant tax *increase* from this piece of shit tax plan.