Focus on Trump’s Tax Plan
Republican presidential candidate Donald Trump recently proposed an innovative new tax plan that he maintains would simplify the tax code and reduce both individual and business taxes while, at the same time, remaining revenue neutral. With Trump currently the front-runner in several of the major polls, Americans were especially interested to hear what he had to say about income taxes. In a nutshell, his plan proposes simplifying the tax code by eliminating loopholes and reducing tax brackets, expanding the 0% income tax bracket for individuals, lowering taxes paid by businesses of all types and eliminating the estate tax.
Here are some of the key provisions of his tax plan:
Simpler Tax Code
Trump’s plan would drastically simplify the tax code by reducing the number of tax brackets as well as eliminating numerous penalties and loopholes. His plan suggests reducing the current seven tax brackets to four (0%, 10%, 20% and 25 %) as well as eliminating such complicating items as the Alternative Minimum Tax and the marriage penalty, among other things.
Lower Tax Rates
The tax brackets suggested by Trump would lower the current income tax rates across he board. In addition, his the expansion of the 0% tax bracket to include individuals with an annual income of less than $25,000 and couples who earn less than $50,000 would esult in an increase in the rolls of those would not owe any income tax. With the institution of the Trump’s tax plan, over half of American individuals and families would not owe any tax at all!
Reduction in Business Taxes
The Trump tax plan would cap the business tax rate at 15% for businesses of any size or business structure. This would include the self-employed, Partnerships, LLCs, S- Corporations and even large C-Corporations that currently pay more than double that rate. Trump maintains that making the United States more attractive to business by lowering the corporate income tax rate to 15% from the 35% rate that they are currently paying would go a long way toward deterring corporate inversions.
Elimination of Estate Tax
Trump’s plan would completely eliminate the estate tax, thus allowing heirs to inherit estates of any size without having to pay income taxes. The argument in favor of this tax move is that income taxes are paid at the time funds are earned so taxing them again amounts to double taxation. Although the ceiling on the asset value of estates that can be passed down tax free has been increasing over the past ten years, from $1,500,000 in 2005 to $5,430,000 for the current year, Trump’s plan would amount to a significant tax savings for those who inherit estates in excess of this amount.
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