The time has finally come for the Trump administration to release their proposal for the much-anticipated Tax plan. This was a major focal point of the Trump campaign of “Making America Great Again”. His voter base of middle America wanted to believe he was going really shake things up and improve upon our system. But has he? well, that is up to you to decide! We here at Orca went to the depths of the proposal and have the quick summary of the good, the bad and the ugly for you.
Let's start with the highlights of the plan, Overall the plan is very similar to the final proposal that Trump released during the election. Remember the plan that would cost about $7.2 trillion? ya, that is trillion with a T!
Key changes from Campaign Plan
• Standard Deduction going up to $24,000 for married couples, not $30,000
• Wants to get rid of all deductions besides mortgage interest and charitable deductions (Ironically how he takes all his deductions)
• Wants to make tax brackets 10, 25, and 35 instead of 12,25, and 33 percent
• Finally, he changed his tune on overseas income, now exempting all of them and taking a more “territorial” approach
• Cut corporate tax rate from 35 to 15 percent
• Repeal the Alternative Minimum Tax
• Repeal 3.8% Obamacare tax (Hits investments and small businesses)
• Get rid of estate and gift tax (something paid only if you have above $5.2 Million in assets left in your estate per person)
• One-time tax on trillions of dollars held overseas (Apple watch out)
The Good, The Bad, and The Ugly
• The changes come with increase in revenue and not spending, and if you are wealthy American your tax rate goes down by 4% (Good or Bad based on your perspective)
• The plan highlights that its main goal as growing the economy and helping middle-class families, but there is not much in the proposal that does this, they are implementing Trickle Down Economics (Bad)
• Initial reports show that many middle-class families will see a tax increase while the wealthy, and corporate owners will see a major decrease in taxes. (Ugly)
Overall it is up to you to decide what you think of these plans as it affects everyone differently, with this only being a proposal no one really knows what the final tax laws will be. Trump is shaking things up but maybe just not the way most of the voters who voted for him wanted him too. We here at Orca will stay up to date and continue to read the boring tax documents do you don’t have to, as always share around and we will continue to post.