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Wednesday, April 26, 2017

Trump debuts tax reform

And on the 97th Day, he rested.

Just kidding. On 97th Day, he kicked the Washington Establishment in its taxing tentacles.

From the New York Times:
President Trump on Wednesday proposed sharp reductions in both individual and corporate income tax rates, reducing the number of individual income tax brackets to three — 10 percent, 25 percent and 35 percent — and easing the tax burden on most Americans, including the rich.
The Trump administration would double the standard deduction, essentially eliminating taxes on the first $24,000 of a couple’s earnings. It also called for the elimination of most itemized tax deductions but would leave in place the popular deductions for mortgage interest and charitable contributions. The estate tax and the alternative minimum tax, which Mr. Trump has railed against for years, would be repealed under his plan.
As expected, the White House did not include in its plan the border adjustment tax on imports that was prized by House Republicans. However, it did express broad support for switching to a so-called territorial tax system that would exempt company earnings abroad from taxation but would encourage companies to maintain their headquarters in the United States.
The plan would include a special one-time tax to entice companies to repatriate cash that they are parking overseas.
That is a grand slam.

Alternative minimum tax -- gone.

Death tax -- gone.

Highest corporate tax rate in the world -- cut more than half.

Tax amnesty to get companies to re-invest in the USA -- coming!

All of this will be paid for by the repeal and replacement of Obamacare.


The best spin the Washington Post could put on it was "White House unveils dramatic plan to overhaul tax code in major test for Trump."

Everything is a major test for President Trump.

He keeps getting straight A's.

Ah, this is winning.

From the Times story:
“We want to move as fast as we can,” Steven T. Mnuchin, the Treasury secretary, said at an event in Washington as the White House planned an afternoon rollout of its principles for what it bills as the first overhaul of the tax code in three decades. “This bill is about creating economic growth and jobs.”
He vowed it would be “the biggest tax cut and the largest tax reform in the history of our country,” in line with Mr. Trump’s grandiose portrayal. But there was no expectation that the White House would elucidate how the deep cuts would be financed, and administration officials are cognizant of the challenges of pushing through a proposal that could dramatically add to the national debt.

Compared to all the lies and promises of Obamacare, this is humble.

Republicans in Congress are pleased.
“I think there’s 80 percent or more common ground here — we’ve got some work to do,” said Representative Kevin Brady, Republican of Texas and the chairman of the Ways and Means Committee. “I think the president is going bold here.”
Reagan looks down and smiles.

Capitalism is back, and making America great again.

The original, "Trump the Press" chronicled and mocked how the media missed Trump's nomination.

It is available on Kindle, and in paperback.
Then came "Trump the Establishment," covering the election, which again the media missed.

It is available on Kindle, and in paperback.

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  1. If they eliminate unreimbursed medical expense deduction, of which none of the drama queen tax return press pool asked anything about, that's basically an obamacare tax in sheep's clothing *even* when you purchase insurance. If you are paying a grand a month (low for family coverage), and you get 12 grand in change for one standard deduction (double what it is now) it's basically break even. Married helps; kids help; dog in college helps for one year; but the med deduction needs to stay.

    Devil's in the details once the Uniparty gets a hold of it. Who knows how it will break.

  2. The days of the billfoldectomy appear numbered.

  3. This comment has been removed by the author.

  4. The unreimbursed medical expense deduction is worthless to most people. When I got married, all medical expenses were deductible. But not health insurance expenses, which is kind of silly when you think of it. The first year we had medical expenses, they had to be over 2% of you earnings or something near that. My daughter had $2200 in unreimbursed medical expenses in 2015 with $24000 in income. Not deductible, less then 10%.

    If the politicians really want us to have healthcare, then both health insurance and health expenses should be 100% deductible right off the top, over and above the standard deduction.

    1. @Russell G and Gospace: Why should health care or health insurance be given a tax preference over food or shelter? All three are important to the quality of life. If the tax code exempts one, it should exempt all three: otherwise it should exempt none of them. Such things are the cost of being alive and without which life might not even be worth living. Seriously, there is only one answer to this situation of selective preferences and that is a national sales or excise tax. Until that day comes when we tax people's spending rather than their earnings, there will always be rent seekers who say their special need has to be favored by the tax code. I say under the present system none of them should be favored: no deductions for anything, but a decent standard deduction for everyone.

  5. All negative stories about the president's plan will center on the list deductions.
    Simplify things so I can deduct my accountant would be a dream.

  6. I think Paragraph #2 contains a wee spelling error.

  7. Don I think you meant taxing "testacles."

  8. I knew it would be spectacular, but this surprised even me.

    1. A one-page, double-spaced tax reform proposal is "spectacular"? You must be a Browns fan for something so empty to impress you.

  9. So I'm annoyed and looking for practical interpretation of these tax changes. The Trump Tax proposals for simpler taxes, sound good in principle, but help me understand where I'm going to keep more of my money. I lose my child tax credit and deductions. I lose my alimony deduction. Instead of my taxes going down, it looks like they will triple!!!!

    1. Go figure Unknown, after all, Trump's mighty proposal released yesterday is a single page, double-spaced piece of paper. And his economic gurus who revealed it couldn't answer hardly questions about its implications.
      Trump - MAGA (Making America god awful).

    2. Such a positive upbeat Communist.

    3. The plan is a 4 page document found here I took it at face value and evaluated my tax impact based on the details provided. Hopefully I'm wrong about my numbers "Annoyed Anon"