Posted by: maboulette | April 28, 2017

Trump’s Tax Plan Could Cost From $6 Trillion to $9.5 Trillion

Tax cuts

President Trump has outlined the major tax cuts for Americans Wednesday that could cost $6 trillion dollar to $9.5 trillion from the federal government over the next 10 years and lump it into the national debt.


What it boils down to is this: major hikes in the amount that people are able to deduct from their taxes as well as large cuts for small businesses and corporations – cuts amounting to almost 25% of what they pay now.


At the present time, individuals are able to claim a $6,300 deduction on their income that is taxable.  That will rises to $12,600 for married couples who file taxes together.  Under the Trump’s plan, those numbers will be much higher, according to people briefed on the plan and who spoke anonymously to the Washington Post.


On top of these tax cuts, Trump is expected to outline his proposal to lower the corporate tax rate from 35 percent to 15 percent. And he will seek out reclassification for small, individually-owned businesses that currently file their taxes under the individual code will be able to file their taxes under the corporate tax code instead.


The plan Trump campaigned on laid out the most significant tax cuts for Americans since Reagan introduced his measures in the 1980s.  The problem is after Reagan made these cuts, he had to go back and raise taxes during his second term.  The reason is that “trickle-down economics” looks good on a single piece of paper but doesn’t work and we have two Republican administrations to show as examples.


The theory is that when business taxes go down by 20%, these businesses will use this money to grow their businesses and hire more employees but that has never worked.  It didn’t work under Reagan or GWBush.  Trickle-down economics does not work because it does not pay for itself and all it would do is raise the national debt.

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