Published: Thu, April 27, 2017
Business | By Max Garcia

Trump's plan to slash business taxes seen as 'guidepost' by congressional Republicans

The two Trump advisers said that the top individual tax rate for USA taxpayers would be cut from 39.6 percent to 35 percent, with only two other tax rates, 10 percent and 25 percent, down from the current seven rate levels.

Cook's comment points to a big unknown for the White House and congressional Republicans, who have said business tax cuts would result in more and better jobs.

Many large corporations are enthusiastic about lower rates and say they support the elimination of loopholes, which both reduce revenue and make taxes more complicated.

"We will be back to you with very firm details", Cohn said.

Cohn spoke first, detailing the changes the plan would bring to individual rates, replacing the current seven-bracket system with just three rates: 10, 25 and 35 percent.

"We will make sure that there are rules in place so that wealthy people can't create pass-throughs and use that as a mechanism to avoid paying the tax rate that they should" pay on personal income, Treasury Secretary Steven Mnuchin said Wednesday.

The Trump administration rolled out some broad strokes or "core principals" of the eagerly awaited 2017 Tax Reform plan.

President Donald Trump's team boasted Wednesday that its tax-cut plan would lighten Americans' financial burdens, ignite economic growth and vastly simplify tax filing.

The estate tax - still petulantly called the "death tax" by Republicans - has long since failed in its original goal of dispersing concentrations of wealth as batteries of lawyers of accountants find loopholes to shield wealth from this tax.

If Britain crashes out of the European Union without a new trade deal with its biggest export market, politicians have hinted that it could cut taxes on businesses even lower to boost investment.

"I can't support it if it eliminates the property tax and state income tax deductions", Congressman Peter King of NY told AFP. How huge? Last year, the nonpartisan Tax Policy Center estimated that introducing a flat rate of fifteen per cent on pass-through income would reduce tax revenues by about nine hundred billion dollars over ten years.

But do tax cuts really spark economic growth?

However, many economists are skeptical about that argument, as the US economic growth will average about only 1.9 percent over the next ten years, according to the nonpartisan Congressional Budget Office.

Mnuchin insisted the tax plan will benefit not just large corporations, but small-to-mid-sized businesses, too.

While many important details were missing, what was revealed could be a big boon to numerous wealthiest Americas, and even President Trump himself.

"Trump, like New Hampshire Republicans leaders in Concord, have made cutting taxes for the wealthiest and most powerful rather than investing in priorities that will attract and keep our young people, will make our communities stronger and will expand opportunity for struggling families", Woodburn added.

"They went into some suggestions that are mere suggestions and we'll go from there", said GOP Sen.

"It's not the federal government's job to be subsidizing the states", said Treasury Secretary Steve Mnuchin.

But if the proposals became law, an early look at the impact on the tax bills of Californians shows the implications could be profound. The top income tax rate would be reduced from 39.6 percent to 35 percent.

Another piece of the administration's plan will cap capital gains taxes to 20 percent. Len Burman, a fellow at the Urban Institute, was more pointed: "First draft of Reagan tax reform: three-volume 500+ page treatise".

There were reports of the administration planning to remove the tax deductions on 401K plans. And guess what-under Trump's plan, families in those counties wouldn't get enough help to buy dinner at McDonald's. Before the announcement, Senate Democratic Leader Chuck Schumer said his party would oppose any plan that provided tax breaks for the highest earners.

"I like low tax rates, but I don't know how we pay for it", he said. The U.S. has always been out of step with other industrial countries, which tax their companies far less, and as a result has encouraged American companies to locate operations overseas and keep the profit there.

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