Today, President Trump announced his plan to grow the economy and create jobs. The announcement revealed his general plan for tax reform. He did not give a detailed description of every aspect of the plan. Instead, the announcement was conducted today to introduce the concept of tax reform so that the public can gain an understanding of Trump’s trajectory for this nation.
From what Trump has revealed to the public thus far, this is a step in the right direction.
The need for individual tax reform was stressed throughout today’s press conference by Secretary of the Treasury, Steve Mnuchin, and National Economic Director, Gary Cohn. They explained that due to the complexity of the tax code, over 90 percent of Americans need assistance to merely file their personal taxes. There over 2,011 pages of explanation regarding Form 1040 alone.
Under Trump’s plan, there will be zero taxes on the first $24,000 that a married couple earns. All tax deductions will be eliminated except for mortgage interest, charitable donations, and retirement payments. Dividend income will return to 20 percent. The 3.8 percent Obamacare tax will be repealed as well.
Seven tax brackets will be reduced to three under Trump’s proposed plan. The new tax brackets would be 10 percent, 25 percent, and 35 percent. However, Congress would determine how much money an American family would be required to make before they jump between tax brackets.
Trump intends to repeal the death tax. American farmers and business owners will no longer need to pay thousands of dollars to their accountants and attorneys each year in order to pass the “family farm” to their children. Trump also plans to repeal the Alternative Minimum Tax.
American families will not be the only ones to benefit from Trump’s tax reform. Trump proposes a 15 percent business tax rate. Furthermore, as in many countries around the world, this would be a territorial tax system. American companies would not be charged taxes here in America for portions of their business that are completely contained in foreign countries. The President and Congress are still negotiating on exactly which tax breaks for special interests will be eliminated.
One of the most important parts of this tax plan is that Trump plans to re-patronize the money that is currently trapped overseas. The actual tax rate on this foreign capital has yet to be determined.
While Trump has only given us a 30,000-foot view of this major tax reform, he has announced that throughout the month of May, he will be holding listening sessions to gain valuable feedback. Trump is working closely with the leaders of the House and Senate to make sure a plan is put in place that will help this nation’s economy grow at a rate of 3 percent or more.
Tax reform has been a major campaign promise for the Republican Party for many years. Trump is working to fulfill that campaign promise. Trump’s plan appears to be a major overhaul from the status quo. As the details of this tax reform package are revealed in Congress, the public should have reason to rejoice as they realize that they will likely keep substantially more of their earnings in Trump’s America.