Trump tax plan: Relief for his voters but lots of unknowns

Trump's Tax Plan Would Offer a Huge, Government-Sponsored Gift to His Kids

Additionally, Trump's plan would eliminate the estate tax or "death tax". The benefit to Trump could run as high as tens of millions of dollars a year.

"It will happen quickly, and. the jobs have already started", Trump said, adding that "a lot of positive things" are going to happen on tax reform. But Trump's top economic adviser used some bad math to describe the proposal, raising questions.

"We're going to double the standard deduction so that a married couple won't pay any taxes on the first $24,000 of income they earn".

About 70 percent of taxpayers take the standard tax deduction when they file their taxes. If this plan is passed, very rich people could give billions to their families without paying any taxes on it. In fact, 44 percent of all USA households pay no federal income tax, though most pay other taxes. She added, "What few details are here overwhelmingly cut taxes for the richest and do little for middle class Americans and those trying to get there".

Alternative Minimum Tax repeal: As he mentioned in his campaign, Trump wants to repeal the AMT.

By dropping down the corporate tax rate below the top personal tax rates, the plan will open up a troubling incentive. And some 14 percent of the profit was taxed at less than 15 percent, the rate the Trump administration has proposed as the new statutory maximum.

Trump also plans to propose a tax on over $2.6 trillion in offshore earnings. The president's proposal for rate parity would make American businesses immediately more competitive. And as for individuals, Americans at nearly all income levels can expect a tax cut, including cuts described by NPR as "modest" for the middle class. It is hard to gauge the precise impact, because Trump did not specify the income levels that define the three brackets. As a result, many more low to moderate income families would pay no taxes. Without it, he would have paid just $5.5 million, according to a leaked copy of that year's return. The plan would eliminate all individual deductions except the charitable and mortgage interest deductions.

Last year, more than 43 million families claimed the deduction, saving them almost $70 billion.

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The tax reform proposal unveiled Wednesday will benefit businesses and Trump. But pass-through income is taxed only once, said Chuck Marr, director of federal tax policy at the Center on Budget and Policy Priorities.

But the Tax Policy Center, a joint venture of the Urban Institute and the Brookings Institution, estimates that a version of the tax cuts would cost $6.2 trillion in revenue during that same period, leaving a $4 trillion gap even with Mnuchin's projected growth.

The nominal corporate tax rate would be lowered from 35 percent to 15 percent.

Again, without Trump's tax returns, it's impossible to say which breaks in those broad categories he relies on to reduce his taxable business income.

Trump's idea to cut tax rates fits nicely with Ryan's goal.

If the CRFB estimates are correct, the Trump tax plan could push the country's accumulated debt to 111% of gross domestic product by 2027, higher than any time in US history and far above the 89% now projected by the CBO.

In announcing the guiding principles for tax reform on Wednesday, Treasury Secretary Steven Mnuchin said there would be only two tax deductions that would be sacrosanct in negotiations with Capitol Hill. "It is time to restructure everything to ensure that our tax code reflects the best interests of our economy as we attempt to recover from the worst ten year period of GDP growth in our nation's history, including the Great Depression".

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