Trump Tax Plan Could Lead To Tax Increase For Some New Yorkers

Justin Sullivan  Getty Images              The mortgage-interest deduction benefits wealthy Americans the most according to economists

U.S. Treasury Secretary Steven Mnuchin confirmed on Wednesday that the administration proposes to cut the corporate tax rate to 15 percent from 35 percent in its long-awaited tax plan. The less Republicans are willing to restrain spending now, the more restrained their tax cuts should also be. "My tax return is this high".

More lower-income Americans would pay no tax at all, and there would be relief - still undefined - for families with child care expenses.

President Trump, obsessed with the 100-day mark he has spent all week disparaging, was determined to introduce the biggest tax cut ever even if it was lacking in details.

But until we actually get to see his taxes, it will be very hard to know how much of a benefit Trump himself is getting from his tax plan.

Trump economic adviser Gary Cohn says the plan will cut taxes for the American people, especially low- and middle-income families. This is the famous discredited theory of supply-side economics.

By dropping down the corporate tax rate below the top personal tax rates, the plan will open up a troubling incentive. It has the potential both to jump-start economic growth and ease the burden on middle-class taxpayers. It will be the projects and services most affecting average Americans that will go away. "This plan is just tax reform", he said. But budget plans should not count on such future growth.

We know the Trump plan would kill itemized deductions except for mortgage interest and charitable contributions.

So here are five major questions we're still asking about the plan.

Be wary of White House claims about tax plan
There are millions of these businesses, known as "S Corporations", and they are often small, family-owned firms. But the true effect of this tax cut will depend on how the Trump administration defines a small business owner.

Effectively, we'd borrow from China or other countries to finance huge tax breaks for Trump and his minions.

The Democrat-led state Assembly is likely to support the measure but not the Senate, where Republicans are in charge.

President Donald Trump has finally revealed his plan to "massively" cut our taxes. Ron Wyden, or OR, ranking Democrat on the Finance Committee. The plan doubles the standard deduction, potentially making the loss of any particular deduction moot.

For instance, constituents in the district of Republican Rep. Peter Roksam of IL, the head of the House Ways and Means subcommittee on taxes, took the 10th highest value of SALT deductions per filer in Cohn's list and the third highest for a GOP member outside of California, New York, and New Jersey. He's never disclosed proof of an audit and tax lawyers say there's nothing preventing him from releasing his returns if he's under one. The median USA household income is slightly above $50,000 annually.

Andrew Kahn, a shareholder at Concannon Miller & Co., Hanover Township, Northampton County said, "If the corporate tax rate gets lowered to 15 percent, that's great for business".

The number of personal income tax brackets reduced from seven to three, with a top rate of 35 percent and lower rates of 25 percent and 10 percent.

Cuomo, speaking in late March, said losing the ability to deduct the state and local taxes could even "expedite" wealthier New Yorkers leaving the state.

Related:

Comments


Other news