Trump calls tax-reform plan 'rocket fuel' for USA economy

Trump calls tax-reform plan 'rocket fuel' for USA economy”

More money for rich people?

That includes more than a third of taxpayers making between about $150,000 and $300,000, mainly because most itemized deductions would be repealed including for state and local taxes, it said. But it faces an uphill battle in the U.S. Congress with Trump's own Republican Party divided over it and Democrats hostile.

The analysis also found not only that the rich would massively benefit from Trump's proposals, but also that many middle class and low-income families would end up paying more in taxes. That income tax bracket was created in the 2001 Bush tax cuts. But in a recent speech in Indianapolis, Mr. Trump asked: Why cant this be a bipartisan tax cut bill?

Financial markets rallied on the plan's unveiling, an event long anticipated by traders betting that stocks would benefit from both faster economic growth and inflation.

"Tax reform will help families who are struggling to make ends meet and employers who want to grow their business and create new jobs", said U.S. Chamber of Commerce president and CEO Thomas J. Donohue. And even if tax cuts do stimulate the economy, presently the USA economy is doingwell with near 3% GDP growth. They have promised to raise money by cutting tax deductions, but they have been more specific about the deductions they would keep than the ones they would eliminate.

But it turns out most observers think the Trump plan will ultimately have little effect on Pennsylvania's tax reform debate.

President Donald Trump released his weekly address on Friday 9/29/17. If taxes are a factor affecting economic growth, one should see an inverse relationship between growth of the USA economy and higher tax rates. The last one was passed in 1986 under Republican President Ronald Reagan. Mr. Mnuchin said he expects the plan would boost gross domestic product growth to an annual rate of 2.9% over the next 10 years, generating an additional $2 trillion of revenue. But it does not set the income levels at which the rates would apply, so it's unclear just how much of a tax change there might be for a typical family.

The Trump plan, in exchange for dropping some of the deductions and personal exemptions, would increase the standard deduction all taxpayers are eligible for to $24,000 for a married couple, filing jointly, or to $12,000 for a single filer. Because the 10% bracket now includes only a small amount of income, those who earn the full $37,500 pay an effective tax rate that's closer to 14%. "My gut", he said in a telephone interview, "is they can make a pretty good case: Send them a message".

For the majority of American manufacturers that file taxes as sole-proprietors, corporations or partnerships, Trump said his administration will cap their top tax rate at a maximum of 25 per cent.

Trump has proposed to reduce the corporate tax rate to 20 per cent.

The effectiveness of the USA system depends on voluntary compliance, and voluntary compliance, in part, depends on the belief by taxpayers that they're not being treated like chumps. But regardless, it's clear that Trump's family would stand to gain if the estate tax were eliminated. The framework also increases the child tax credit and abolishes the estate tax. The proposal calls for the elimination of the deduction for state and local taxes.

"Devastating" was the word the governor used to describe the plan's potential impact on famously high-tax NY, adding that such a plan might convince New Yorkers that "maybe it's time we leave" the state. It would shrink the current seven tax brackets into three - 12 percent, 25 percent and 35 percent - with the potential for an additional top rate for the highest-income taxpayers.

The analysis shows that the elimination of state and local tax deductibility will mean that 3.3 million NY taxpayers would see their federal income tax liability increase by $17.5 billion.

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