Most Americans Want Major Changes To Tax System

Republicans May Not Be Able to Go It Alone on Tax Reform                 

     

     REUTERS  Carlos Barria

Republicans May Not Be Able to Go It Alone on Tax Reform REUTERS Carlos Barria

The President said his tax cut proposal wouldn't help the country's wealthiest taxpayers - including himself - but suggested it would bolster his legacy instead.

The chart below shows what we do know so far about how Trump's tax plan could change federal income tax brackets, compared to what we have today.

President Donald Trump is in a big rush for Congress to approve big tax cuts, and he is using the damage left by Hurricane Irma to argue his case. In fact, many more people would end up paying nothing in taxes.

Nationwide, about a third of all taxpayers itemize their taxes and virtually all who do so claim deductions for their state and local taxes on income, real estate, property and sales taxes. Tax policy experts have concerns that repealing it would result in a federal budget shortfall. It's just another tax cut for the wealthy that the nation can not afford.

This is the tax measure that will cause the biggest trouble for state lawmakers.

"It seems that President Trump and Republicans have designed their plan to be cheered in the country clubs and the corporate boardrooms", the Senate minority leader said from the floor Wednesday.

The Republican plan "would result in a massive windfall for the wealthiest Americans and provide nearly no relief to the middle-class taxpayers who need it most", Senate Minority Leader Chuck Schumer, a New York Democrat, told colleagues on the Senate floor. Rep. Pete King (R-NY) a Trump loyalist, has said he can't vote for any bill that repeals the SALT.

Mnuchin on Sunday didn't mention specific tax rates - for individuals, corporations or pass-throughs. Third, make America the jobs magnet of the world by leveling the playing field for American businesses and workers. This is another tax break to the wealthiest Americans.

Aside from the wealthy, corporations will also get a boost as their tax rate is slashed from 35 to 20 percent. I think there's very little benefit for people of wealth, ' Trump told reporters at the White House.

New benefits would be given to firms in which the profits double as the owners' personal income. Republicans love to call the estate tax "the death tax", but the idea that family farms and small businesses are being routinely lost because of the estate tax is a myth. Congress' Joint Committee of Taxation says far less than 1 percent of all Americans pay any estate tax, and almost all of them are among the wealthiest 5 percent. This affects sole proprietors and other mostly smaller businesses. I'd rather take that argument off the table up front and make the case that, since the top earners pay more, they deserve the cuts.

Rates in the lowest tax bracket, however, may actually increase, from 10 percent to 12 percent, according to a report Tuesday from Axios.

But numerous specifics, such as whether the individual tax cuts would favor the wealthy, are still to be worked out.

Republicans plan to push for collapsing the seven income tax rates to three new brackets, with the top bracket being 35 percent.

The plan aims to simplify and cut taxes for the middle class by doubling the standard deduction to $12,000 for individuals and to $24,000 for married couples.

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