Trump Usa President Politics Republican Go

Donald J. Trump initially proposed his tax strategy of cutting taxes for businesses and the middle class while campaigning for the primaries. In August he revised his strategy and added many details such as Tax Brackets, Standard deduction changes, corporate rates and removing the gift/estate tax. Furthermore, Donald J. Trump’s plan might have an impact on the market at domestically and globally. In this paper, I aim to reevaluate the effects of his tax plan, on the person, america and examine some assumed outcomes for the United States from a global standpoint.

Individual
Let’s face it, there are not many people on this earth that think about the good of their country before the good of their pocket. Trump’s tax cuts are close to home and can help the average American. This implies that around $8,000 for single filers and $16,000 is completely untaxed; together with the fact that the majority of incomes will see a lowering of effective tax rates, everyone will be paying fewer taxes. (Fox, Pg. 1) Trump’s system is extremely attractive across the board, but two groups benefit considerably. First, since the standard deduction and the 0% tax bracket are increasing some households earning low incomes might experience no tax at all. The second group that could undergo a enormous tax break is multi-millionaires.

Some people compare Trump’s tax plan to an escalated version of the George W. Bush tax cuts. Another problem with Trump’s tax strategies is they are very vague in substance and impractical in today’s society in which corporations and individuals take advantage of every break possible. 1 loophole that exists is that people can set up LLCs and like corporations and actually lower their tax rate, this is because of very low unearned income tax prices. By funneling all of your income through these mock corporations, people could create a tax ceiling of 15%(Trump’s unearned income choice rate) although the normal tax brackets go around 33%. It can be reasonably assumed that this strategy once brought to a concerted congress would be tightened up with a lot more rules added to remove glaring loopholes and problems with the plan. In the case of a democratic house or senate, these tax reforms could be taken down entirely. With the assumption that his entire plan goes through the drop in tax revenue could create a strained relationship between the United States’ revenue stream and the expenditures they’ve budgeted for, thus influencing their ability to create an economic incentive for the U.S. market.

National
On a grander scale than the individual, the United States economy would change due to Trump’s tax program. After the individual changes are accounted for, the corporations are the next largest factor. Trump plans on dropping corporate tax rate considerably, which would create an upward swing in after-tax profits. This benefit could go two ways; first corporations could pay the excess benefit out to shareholders in dividends or second businesses could reinvest the excess money into retained earnings. Either way, this would give an injection of good profits and growth to the market. Regarding United States tax revenue, this growth caused by the tax break would compensate for some of the deficit in tax revenue even more so when most of these profits were distributed in dividends. To further reduce the tax shortage Trump has suggested a one-time offshoring tax which would be compensated by any U.S. firm that has moved its operations abroad. This is because of drop in tax revenue and a projected growth in spending. Some significant expenditures would include border security (the wall) and increases in military spending. Trump has promised to reduce expenditures in other facets but has only stated he will eliminate inefficiency and cut out waste. Trump’s economic policy is not very beneficial for the United States economy. Because of increased globalization and low reinvestment of profits, the initial gain from Trump’s plan decreases and really reverses. In general, Trump’s plan may be very bad for the economy, especially when previous tax cuts are any indication of the effects.

Global
Internationally, the United States is no longer the world’s only powerhouse. With a large number of other nations on par with the US and winning in some facets. The United States is in no place to fall behind. The biggest problem with Trump’s tax plan and his general economic policies is that they are isolationist policies. Globalization has created winners and losers, but segregating the USA by pulling from trade deals like NAFTA will really decrease exports and make our exports more expensive. Additionally, the one-time offshoring tax will produce a strain on multinational companies. The largest upswing for the United States are the new low corporate tax rate could attract businesses to return to America and enjoy the low taxes. This is shown with the temporary gain in GDP growth rate. It has not yet been shared exactly the way the lower corporate tax rate would bring businesses back, most companies that have offshored their business still maintain corporate status in america and I doubt that a break in corporate taxation would be higher than what it costs to pay an American Labor force.

In conclusion, Donald Trump’s tax program can and could have a much greater impact than it appears on the surface. If the senate agreed to adopt Trump’s full plan as it is now: the person would see personal taxes decrease and corporate taxes decrease too, Federal revenues would swing high then reduced along with the United States GDP, and Trumps overarching economic policy could put America in a very sticky place in the international economy. As a forewarning, this essay does follow several assumptions made by Moody’s and the Tax magician. In final thoughts, Trump’s tax plan would benefit Individuals and the United States corporations greatly but would create friction in the entire US economy could cause another economic downturn.

Trumps Tax Plan

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