The Trump Administration's New Income Tax Ideas
The nuts and bolts of Trump’s new tax plan at this point
Nov-14-2016(SALEM, Ore.) - A historic year of political campaigning has just came to an end and the result of a bitter, divisive and sometimes surreal Trump campaign resulted in a win for the ex-reality star and business mogul.
No longer will he be known by “The Donald” but instead by “President Trump.” But what everyone is asking at this point – both those who voted for him and those who didn’t – is what the future is going to hold.
One of the biggest platforms that Trump was standing on was his tax ideas – and now that he’s in office, he has a chance to get them passed and implemented. But what exactly does Donald Trump have in mind? What will the tax situation look like in a year or two?
The Trump Administration’s Old Tax Plan
When the Trump presidential campaign was just starting (and everyone still regarded it as more of a political joke than anything else), NPR money analyzed Trump’s then-tax plan; to be blunt, it was abysmal.
It had lots of holes and problems and most importantly, showed a $12 trillion deficit over the current tax plan – which meant that if the country were to sustain those tax cuts over a decade, it would have to cut spending by 25% - or come up with some other way to get the money, which would logically mean borrowing it.
Yes, that’s right. Donald Trump wanted to get rid of a fourth of government services, thereby rendering them ineffective – and bear in mind this includes everything from welfare to military –or add another $12 trillion to the already $18 trillion that the country already owes.
Essentially, Trump wanted to almost double our debt.
Donald Trump’s New Tax Plan
Obviously, that wasn’t popular with voters and the team immediately came up with a better one. Enter the administration’s “new” tax plan.
The word plan is used here, but in reality, there are a couple of versions and it is difficult to nail down exactly what Trump intends to do. Here are the basics of Trump’s new tax plan as it relates to income tax:
Tax Brackets: Trump wants to simplify the income tax brackets, changing them from seven to three. Those three brackets will be:
12% - $0-$75,000 (Income of Married Couple)
25% - $75,000 to $250,000 (Income of Married Couple)
33% - $250,000 and up (Income of Married Couple)
This is a change from the previous tax brackets which ranged from 10% to 25% for up to $150,000 in joint income and 39.6% for married incomes above $466,000. You can check out the full tax bracket here.
For some people, this will mean lower taxes. For others – particularly some middle-class Americans – their taxes will be higher, partially because Trump is repealing personal exemptions and “Head of Household” filing status.
Trump is also increasing the standard deduction amounts for both single filers and married couples and putting a cap on itemized deductions.
Other Financial Effects from Trump’s Plans
This is just some of the tax plan that Trump is proposing and there are actually a couple of different forms of it.
It isn’t clear exactly what will happen when the Trump Administration actually takes over and some experts are predicting that stock markets could crash while others think that the market might actually be healthier due to Trump’s presidency.
Either way, you want to make sure that you have a personal account advisor to handle your investments. Companies like Glenmore Investments make that a staple of their investment services and the company you choose should do the same. It is more important than ever now that Donald Trump has been elected.
Source: Salem-News.com Special Features Dept.
