President Donald J. Trump's tax proposals, despite his claim of them being pro-middle class, will clearly benefit those who pay higher rates of income tax. Analysts have concluded that the real estate developer turned politician has not really made any substantial changes to it in this respect. The President, in a bi-partisan meeting with the members of Congress on September 13, said that he intends to slash the rate of corporate tax from the present 35 percent to a new 15 percent. Individual income taxes under the plan will also go south.
The US administration under Trump had published an empirical document in April which outlined a few substantial tax changes like doing away with the estate tax. The latter is at present applicable only for those whose assets exceed $5.49 million. According to Congressional Budget Office, a non-partisan outfit, the move to slash the corporate tax from the present 35 percent to 15 percent will prompt the investors to carry the burden of 75 percent of the corporate tax.
The Trump administration also wants to do away with the alternative minimum tax. This was crafted to make sure that the super wealthy taxpayers pay a certain minimum tax. The last proposal was to merge the present seven brackets of income tax, ranging from about 10 percent to about 39.6 percent and make it to three- 10 percent and 25 percent with the highest at 35 percent.
Steven Mnuchin, the Treasury Secretary, said that the Trump administration is all for ending all kinds of 'loopholes' except charitable giving and home mortgages. The administration, however, has not specified any income ranges for the proposed brackets of income tax. It follows that the Tax Policy Center, a bipartisan organization, has to calculate by itself where the three brackets could begin and also end.
Since the Trump administration is in discussions with the GOP leaders, there is more than an even chance that the tax plan could be revised. A media house has reported that the White House is thinking of leaving the top bracket at about 39.6 percent. If it does, then the 35 percent will be abandoned. Paul Ryan, the House Speaker, said that slashing the rate of corporate tax to the middle and lower 20s is much more achievable than the proposed 15 percent. The President, however, is fixated towards the 15 percent rate.