The Effect Of Trump's Tax Plan On Kentucky: It Varies

Andrew Cummings
April 29, 2017

Trump has repeatedly refused to release his tax returns-which would provide better insight into how much he'll save under his tax plan-and Treasury Secretary Steve Mnuchin said Wednesday Trump "has no intention" of releasing them.

Perhaps not surprisingly, one person who would benefit greatly from Donald Trump's tax plan is Donald Trump himself.

That's a departure from what Gary Cohn, Trump's economic adviser, said on Wednesday.

It also doubles the standard deduction, to $12,000, so married couples making less than $24,000 would not pay income taxes at all. Fun fact: The last big tax reform achievement, in 1986 under President Ronald Reagan, came from both sides of the aisle.

ABC News host George Stephanopoulos asked Mnuchin on "Good Morning America": "Can you guarantee that no one in the middle class is going to pay more [taxes]?"

The corporate tax cuts are also meant to encourage more businesses to stay in the US, which now has the highest corporate rate among advanced economies.

As of this writing, Trump's tax plan is little more than a wish list and what form it takes when it is time to be signed by the chief executive remains to be seen. But there's an even bigger potential windfall that investors should be paying attention to: The one-time tax holiday for USA companies that want to repatriate cash from their foreign subsidiaries.

Also during the campaign, Trump proposed getting rid of the "head of household" filing status, which is mainly used by single parents. Is this approach to lower rates and a simpler code a step forward or backward? "That's likely to induce many more affected New Yorkers to reconsider their residency status", he said. White House officials claim they would find a way to prevent lawyers, consultants and other high-income earners who now pay at a higher individual rate (up to 39.6 percent) from sliding into the 15 percent category.

Even with the standard deduction doubling, the average taxpayer may not save much money from the new tax plan.

"For most Americans, we think they should be able to do their taxes on a large postcard."

Yet during an interview on Thursday's Today show, Mnuchin was back to claiming that the plan "is about a middle-income tax cut".

Under the proposal, individual tax brackets would be reduced from seven to three, taxed at rates of 35%, 25% and 10%. But the administration has yet to determine the income levels for people who would be put in each bracket.

But one particular change - the elimination of the ability to deduct state and local taxes - would hurt California more than nearly any other state.

In its editorial titled "President Trump's Laughable Plan to Cut His Own Taxes", The NYT claims the tax plan was created exclusively to benefit Trump and other rich captains of industry. Without it, he would have paid just $5.5 million, according to a leaked copy of that year's return. Trump is proposing big tax cuts for the superrich, including repealing the estate tax.The federal estate tax is widely misunderstood. Through that lens, the President's cuts would amount to about 2.3% of the country's GDP over the next 10 years, the group estimates.

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