At a rally in Indianapolis on Wednesday, President Trump revealed that his new tax Plan, nine pages long and still in progress, will not benefit him. Since he has not released his tax returns to the public, there is no way to know for sure if the plan will benefit him or not. However, based on his finances and previously released taxes, this plan could definitely end up benefitting him and other wealthy people across the country.
No more paying the alternative minimum tax
The Alternative Minimum Tax was passed in 1969. This bill was put in place to make sure that wealthy taxpayers end up paying at least their fair share.
With this bill in place, wealthy individuals have to fill out a second tax form that requires information for things such as estates and trusts. If that amount is higher than the tax already owed, the person must pay the difference.
According to a leaked tax document from 2005, Trump saw his tax bill go from just over $5 million to over $36 million. Without that, he could have saved $31 million. To the average person, both of those amounts are a lot of money. Let's keep in mind that Trump's current listed net worth is $3.5 billion, although Trump himself claims it is over $10 billion.
Family doesn't have to pay the estate tax
The estate tax is the tax on money inherited from loved ones who have passed away.
Currently, the first $11 million is not taxed for married couples. This means that only the wealthiest people have to pay the tax, which can be up to 40% of the total inheritance.
With the numbers of Trump's net worth, whether it's the $3.5 billion that financial journalists have calculated or his claim of $10 billion, his family has a lot to benefit from if the estate tax is lifted.
The treatment of pass-through corporations
Small businesses were in mind when the idea of pass-through corporations was brought up. These corporations are so named because the corporate money made passes through directly to the owner of the business. However, in recent years this system has been abused by corporate business owners who want their earnings taxed at a lower rate.
According to the new tax plan, pass-through corporations would have a 25% tax rate, which basically reduces the corporate tax rate by almost 15 percentage points. The Trump Organization owns over 500 pass-through corporations, which would all see a significant drop in their tax rates if this bill goes through.
Although this plan appears to be beneficial to those hardworking Americans out there, it's clear that Donald Trump's plan is only here to add more money to the net worth of extremely wealthy Americans by adding more tax cuts.
