Trump’s Proposed Tax Policy
How could Trump’s tax plan impact you?
With the President-Elect in place, tax law changes are more likely to occur in the near future. Although the details of president-elect Trump’s tax plan are still unclear, it is essential to consider the possible changes and identify planning opportunities that may exist.
If for the sake of analysis, we assume that Mr. Trump’s tax proposals become policy, the question arises, “How do these changes impact individuals, businesses, and the overall economy?”
President-Elect Trump’s primary vision is to protect middle and low-income Americans by reducing taxes. Theoretically, the less taxes we have should result in increased consumption because of the extra dollars being reinvested into the American economy.
Also, by lowering the business tax rate from 35% to 15% firms will inevitably retain profits of which they can pour back into the business. The outcome of greater liquidity creates opportunities for businesses to improve growth.
Whether you agree, disagree, or are unsure of Trump’s tax proposals, all we can do is begin to synthesize the effects of the proposed provisions, and prepare accordingly for 2017 and beyond.
Proposed changes to the individual income tax:
An above-the-line deduction for childcare costs up to the average cost of care in their state. The deduction would be phased out for individuals earning more than $250,000 or couples earning more than $500,000.
Childcare tax credits of up to $1,200 a year for childcare expenses to lower-income families, through the earned income tax credit.
Proposed changes to business income tax:
Proposed changes to Federal Estate and Gift Tax: