It seems that President Trump will begin traveling to various states to promote the tax reforms he promoted during his campaign. His first planned stop was to be last Wednesday in Missouri. President Trump’s plan is to not only explain what his tax reform ideas are, but also why they are so important to the American people that we cannot do without them.

Like most politicians, President Trump had some pretty lofty ideas on how to “reform our tax system”. He certainly is not the first President to come up with such grand ideas, and he definitely won’t be the last. However, his ideas have caused some buzz for sure because of just what he plans to do.

During his campaign, President Trump outlined some of the tax reforms he wished to accomplish. Some of these reforms included: reducing the complexity of the tax system by trimming the now 7 individual tax brackets(ranging from 10% to 39.6%) to only 4 – 0%, 10%, 20%, and 25%, doubling the standard individual deduction while eliminating all other itemized deductions except for the mortgage interest deduction and deduction for charitable contributions, and eliminating the alternative minimum tax (AMT) and the “death tax” (also known as estate tax). His proposed reforms did not stop with just the individual level. President Trump had reforms in mind for businesses as well. Some of his ideas  included: reducing the corporate tax rate to 15% for both large corporations and “small businesses”  (which encompass pass-through entities including partnerships, sole proprietorships, S-Corporations, etc.), introducing legislation that would require businesses to pay taxes only on income earned in the United States, and enforcing a “one-time tax” on the trillions of dollars that are held overseas.

As with all politics, there is never going to be a complete consensus in which all Americans come to a unanimous agreement. Those that favor President Trump’s tax reform ideas claim that the filing process for most middle and lower-class Americans will be easier than ever and that most of these households will save around $1,000 each year in taxes (plus preparation fees).  However, those on the other side of the fence say that the President’s plan favor the extremely wealthy and that those people will reap the majority of the benefits of the tax cuts being proposed. With the top individual tax rate lowered and the corporate and pass-through entity tax lowered to a mere 15%, the opposition to President Trump’s tax policy fear that the only group that will benefit is the extremely wealthy, a group to which President Trump himself belongs.

Of course, the President cannot reform the tax system alone; he will need the help of Congress. Supporters and opposition to President Trump’s  policy ideas can agree on one thing: tax reform is going to be an arduous uphill battle. In all of the uncertainty surrounding these reforms, Americans can be sure that nothing is going to happen overnight. Missouri is only the first stop on the long road to tax reform. Stay tuned to the Wealth Builders blog to discover the latest developments in tax reform and how it will affect YOU.

 

Kim, Tae. “Trump to Begin Big Tax Reform Push next Week, Gary Cohn Says.” CNBC, 25 Aug. 2017, 7:31 AM, EST, www.cnbc.com/2017/08/25/trump-to-begin-big-tax-reform-push-next-week.html.

Thompson, Derek. “A Comprehensive Guide to Donald Trump’s Tax Proposal.” The Atlantic, 26 Apr. 2017, www.theatlantic.com/business/archive/2017/04/a-comprehensive-guide-to-donald-trumps-tax-proposal/524451/.