A Breakdown of the Taxbreak Plan

Not to get political, but Trump is on them games again. The latest and greatest game is this God awful tax plan. The actual plan is super long, and not a quick read so here’s a quick breakdown for y’all, and if you want to check out the plan for yourself there’s a link to it here (x).

 

  • Senate plan cuts the corporate tax rate from 35% to 20 % in 2019.
    • House plan cuts it in 2018
  • Senate plan keeps the current 7 income tax brackets, but lowers some of the rates.
    • The House plan reduces the number of tax brackets to only four, and lowers three rates. 
  • Both tax plans eliminate most itemized deductions, not including, charity, mortgage interest, property taxes, and savings for retirement. 
  • Both plans eliminate the deduction for state and local taxes.
    • This is especially concerning for citizens in high-tax states such as, California.
  • The Senate plan increases the Child Tax Credit from $1,000 to $2,000.
    • But more than a 1/3 of low-income families don't make enough to benefit from this.

But what does this mean?

  • This plan helps businesses more than individuals.
    • Corporate tax cuts are permanent. Whereas, individual tax cuts are not.
  • It helps higher income families the most. Everyone gets a tax cut in 2019,  but by 2021 the taxes will increases again for those making $30,000 or less because the deductions and credits they lose won't make up for the lower tax rate.
  • Both the Senate and the House's plans increase the national deficit by almost $1.5 trillion over the next 10 years. 
  • It's based off of trickle down economics. So like gag me.
  • This plan treats graduate school tuition waivers at taxable income!
    • ​Hope you are willing to pay taxes on that scholarship you have.

Basically this plan is trash.