Trump's tax plan, submitted yesterday, is a single page of bullet points. The plan lacks detail and according to an analysis in the NY Times consists of broad brush strokes. But this does not mean that it is impossible to see who will win and who will lose if Trump's ideas become actual laws that can be implemented.
The winners
Businesses that actually pay at a high rate would see it drop from 35 to 15 percent -- a big cut across the board, from mega-corporations to mom and pop enterprises. High-income earners would see their rates fall. The high rate of 39.6 percent on income over around $470,000 for a married couple would drop to 35 percent and they would be exempted from a 3.8 percent tax that helps fund Obamacare.
That tax is currently applicable to those with an income of over $250,000. The Times says creative accounting could reduce the tax on high earners to 15 percent. For example income from investments could be taxed at the low rate.
Estate tax zapped
There would be no estate tax. This applies to the very rich who could pass on their wealth freely under the Trump dispensation. Filling forms by hand would be easier. There would be no Alternative Minimum Tax. There would also be mo border adjustment tax, an idea that appeals to House Republicans.
Trump wins
The Times says these winner suggestions are highly beneficial to Mr. Trump. There would be no tax on his estate.He would pay no alternative minimum tax, potentially saving millions.
He could pay the low 15 percent rate on more than 500 businesses which presently provide him with revenue. It would not be Trump alone who won. Anyone in the one-percent would be a big winner.
Who gains and who loses in Donald Trump's tax plan https://t.co/t0QpiGt1v7
— The New York Times (@nytimes) April 27, 2017
Losers
Blue state residents who pay high local taxes would lose.
Such deductions would be eliminated. Deficit hawks would lose. Estimates are that this plan would create a shortfall of more than $6 trillion which would either grow the national debt or be taken out in comparable cuts in federal spending. The tilt toward the wealthy and businesses is regarded by the Times as a hard sell in terms of Democrats who seek a very different division of wealth.
Could it pass?
It could only pass as a temporary measure because the deficit anticipation exceeds legal limitations. The Times surmises that Democrats will reject this plan while deficit hawks among Republicans will have a difficult time favoring what seems like a major windfall for the rich. It is questionable that any major Trump bills could pass, given the continued toxic atmosphere in Congress.
