Does Trump Tax Plan Cut Me In?

BURIED UNDER President Trump and Treasury Secretary Stephen Mnuchin (L) hope the economy can outgrow the country’s mounting debt load (Photo: AFP/Imagebank)

P resident Trump’s tax reform plan at least according to the broad outline set for release this week will put a little money back into most people’s pockets a lot of money in the hands of corporate America and leave the federal government cash starved as the national debt approaches $20 trillion.

The Trump plan would simplify the tax code reducing the number of tax brackets from seven to three — 12% 25% and 33%. This would return about $400 to $500 a year for lower middle class families earning between $30 000 and $50 000 a year and $1 000 to $1 500 for those earning between $50 000 and $100 000 a year. The tax savings grow exponentially for those earning well into the six figures. The maximum corporate tax rate would be slashed from 35% to 15%. Overall the Urban-Brookings Tax Policy Center estimates the tax cuts would sink the government $15 trillion deeper into debt over the next 20 years.

More details will follow in June but it’s important to remember that a president is free to propose whatever he wishes but under the Constitution the House of Representatives drafts tax policy. House Speaker Paul Ryan has some ideas of his own that clash with Trump’s. If Trump was unable to ram his health care reform plan through the Republican-controlled Congress he is unlikely to fare better with tax reform at least initially.