Published: Fri, April 28, 2017
Business | By Max Garcia

Trump Tax Plan is a Sweet Deal for Corporations and the Rich

Trump Tax Plan is a Sweet Deal for Corporations and the Rich

President Donald Trump proposed dramatic cuts in corporate and personal taxes Wednesday in an overhaul his administration asserts will spur national economic growth and bring jobs and prosperity to America's middle class.

Irish businesses are being reassured over a new tax plan launched this week by US President Donald Trump.

Republican congressional leaders greeted the White House tax announcement coolly, with an emailed statement that said the bullet-points would serve as "critical guideposts" in what's expected to be a months-long effort to overhaul the us tax code. Dubbed by Mnuchin as "one of the biggest tax cuts in history", the tax plan provided few surprises as much of the details had already been circulating in the media in the prior days.

Let me break it down for you.

The interview recalled the roll-out of the plan Wednesday - just in time for Trump's 100th day in office, on April 29 - in which Mnuchin and Cohn handed out a one page outline of the tax plan to reporters, but offered virtually no information otherwise.

Reducing rates on income from pass-through businesses. Also, the official 35 percent corporate tax rate would be slashed by more than half.

"Lower taxes means better cash flow, more opportunity to invest".

In 2014, 44 million taxpayers itemized deductions and 104 million claimed the standard deduction. High earning taxpayers could see an immediate tax break on their income taxes, while low-income families may not feel much of a change, says Alan Cole, an economist with the Tax Foundation, a conservative think tank. Others have proposed a "too big to fail" tax to curb excessive borrowing at over-leveraged banks. But there is something you can do: If you've been mulling a medical procedure or sizable charitable donation, take care of it this year.

In 2005, Trump himself paid $36.5 million in taxes, mostly because of the AMT. However, apart from halving the tax rate for individual tax payers who fall in the Rs 2.5 - Rs 5 lakh slab, the FM didn't do anything else in the Budget for the people in the higher tax slabs.

Florist Rick McVey has a range of possibilities, not just from the prospect of lower taxes, but because he might get more business from customers who have more money. Under Trump's proposal, the estate tax would be repealed.

The secretary was pressed on whether or not the tax cuts are for the benefit of the rich, creating an uphill battle in Congress.

The question is: Does the Trump White House - a warring mix of ideological nationalists, moderate Democrats and a smattering of establishment types lead by a political neophyte as president - have the intestinal fortitude to ignore the noise and make the pro-growth sale to the American people? The Tax Policy Center says those most affected are married, well-off people with large families in states with higher tax rates.

"If you listen to the framework of tax reform, I find that incredibly encouraging for companies like ours", Rick Gonzalez, CEO of drugmaker AbbVie Inc., said on an earnings call Thursday, according to Bloomberg. The current federal budget deficit is around $500 billion.

"If your last name is Trump", he added, "this plan is great for your bottom line".

The administration also called for a "one-time tax on trillions of dollars held overseas" by US corporations.

Instead, administration officials said they did not know at what rate they would set the one-time tax.

The debate that will take place over hashing out these proposals is going to be fascinating, says Tony Nitti, a tax partner at WithumSmith+Brown in Aspen, Colorado.

A review of taxes in the G20, which groups the biggest developed and emerging market economies, tells the same story: US businesses face the highest top rate.

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