Biggest questions Republicans have to answer on tax reform - Daily American Buzz

Biggest questions Republicans have to answer on tax reform

Will this be a massive giveaway to Donald Trump, personally?
President Trump Accuses Obama Via Twitter Of Ordering Wiretapping At Trump Tower During Campaign
One of the most stunning provisions of Trump’s campaign tax proposals was one specifying that “pass-through” income would be taxed as corporate income — not as personal income. That means income from entities like partnerships, sole proprietorships, and S corporations, which don’t pay corporate taxes and instead distribute their profits to their owners, who then pay normal income taxes on them. This is, tellingly, how the Trump Organization is structured: as a collection of pass-through entities, rather than a “C corporation” subject to corporate taxes.

Trump's plans varied a lot throughout the campaign, but the final one he landed on had a 33 percent top tax bracket and a 15 percent flat rate corporate tax. Think about what that would mean for pass-through income earners. It’s not just that people like Trump would see their top rate cut from 39.6 percent to 33 percent. They’d see it fall by more than half, to 15 percent, a truly massive cut.

This would amount to a huge tax break for the overwhelmingly rich segment of the population that relies on pass-through income; about 69 percent of pass-through income goes to the top 1 percent. The Tax Policy Center estimated that this provision as implemented in Trump’s last campaign plan would cost $1.5 trillion over 10 years — more if you include other reforms to the corporate code that Trump would extend to pass-throughs. About $900 billion of that comes from the cut itself, and another $650 billion comes from the new forms of tax evasion it would encourage.

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