For individuals and families, the plan reduces the number of tax brackets (the highest of which is now 39.6 percent) from seven to three, at 10 percent, 25 percent, and 35 percent. While that will unquestionably help businesses across the country, it also will create a huge reduction in government revenue.
But the one-page policy left details of when the cuts will be implemented, over what time frame and how they will be paid for all unanswered. But Trump was elected on a promise to jump-start the economy and produce "jobs, jobs, jobs" - and his opening move puts that goal at the heart of the tax-reform fight. Unfortunately, wonder is all we can do.
Treasury Secretary Steve Mnuchin takes a question in the briefing room of the White House in Washington where he discussed President Donald Trump tax proposals, but not the president's tax returns.
Trump has faced continued criticism over his refusal to release his tax returns, with Democrats signaling his refusal to release them could complicate GOP plans for tax reform. Hopefully whatever ultimately passes benefits the American economy as a whole. The mortgage interest and charitable contributions deductions would stay, but that wouldn't matter if numerous 600,000 Long Islanders who itemize could no longer do so.
Trump's plan has the potential to provide big tax cuts to high-income families - unless you live in a state with high state and local taxes. In big families, this tax exemption can add up. Various Australian economic experts feel this will have a negative impact on Australia's own tax rates.
While the rest of us would see some tax relief, it's hard to say how much, since the plan doesn't include any income thresholds for the new tax brackets. Lower rates for individuals and families will allow them to keep more of their hard-earned money and empower them to invest more in their future.
So far, Trump's tax overhaul, unveiled Wednesday, is flimsy and certainly incomplete.
"It's imperative that our local residents aren't subject to double and triple taxation and retain the ability to deduct local taxes and reduce their federal tax bill", he said in a statement to Newsday. The fact is it affects very few estates. At what income levels the higher rates would become applicable was not revealed.
Tax reform was going to be an important issue in the Trump administration, but something has stopped him short. As Bloomberg noted this past December after crunching the numbers, if Trump's net-worth is the $3 billion that the financial publication estimates it is-and assuming a baseline effective tax rate of 18.8 percent-his estate would save $564 million if the tax were repealed.