Sunday, April 30, 2017

The Trump Tax Plan (Big Tax Cuts)

Under Trump's plan, taxes on corporate profits go from 35% to 15%. They should be zero (like the Bahamas), but this is a good start. Taxes on capital gains go from 23.8% to 20%. Again, it should be zero (as with New Zealand), but it is a start. Rates for all individuals are lowered to three: 10%, 25%, and 35%. The standard deduction for individuals is doubled (politically brilliant). The estate tax and the alternative minimum tax is gone. Popular deductions for charitable giving and mortgage interest are preserved. The hare-brained idea of a “border adjustment tax” is toast.

All of this is wonderful, but the shining light of this plan is the dramatic reduction in taxes on corporate profits. The economics of this are based on a simple but profoundly true insight. Economic growth is the key to a good society. This is where good jobs come from. This is how technology improves. This is what gives everyone a brighter outlook on life. If you can imagine that your tomorrow will be more prosperous and flourishing than today, your life seems to be on track.-Trump’s Tax Plan Is Brilliant Politics and Even Better Economics

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