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Claims about Trump's tax plan don't hold up

Claims about Trump's tax plan don't hold up

By cutting the business rate to 15 percent and setting the top rate on wages at 35 percent, Trump would encourage business owners to cut their own wages and pay themselves in profits instead. The current rate is 28% for income that qualifies, and it hits individuals who otherwise would benefit from a sharply lower effective tax rate because of deductions.

There is no way to know how the mathematics of the proposal would work, since the White House offered no cost estimates, no detail about which incomes would be taxed at what levels and no information about tax deductions or other breaks that might be eliminated to make up for the lost revenue. If the tax cut applies to all business income reported on individual tax returns, it would be a huge benefit for many wealthy families.

Doubling the standard deduction - or at least raising it to $24,000 - could provide significant tax relief to middle-income families.

An exchange between White House press secretary Sean Spicer and a CNBC reporter on Thursday led to a moment of confusion over whether the Trump administration's new tax plan would mean retirement accounts lose their tax-exempt status.

It also omits much of the work that Ryan and other Republicans have done to craft a comprehensive plan. "He will get this done for the American people", said Gary Cohn, director of the White House National Economic Council. By shifting the board and rigging the game, they are making it less likely that average citizens can ever reclaim control over our economy or political system from corrupt corporate masters who have taken over.

Ruffin said he told the president that Democrats would hire "armies of accountants" to pore over the documents and "make an issue out of any and everything".

"It is a budget that is morally bankrupt", Perez said, according to the Hill.

For example, the plan promises to reduce the tax brackets to 10 percent, 25 percent and 35 percent, but doesn't say who would fall into those categories.

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It would be hard, however, for Trump's aides to identify enough breaks and loopholes to make up for the major tax cuts that Trump wants to grant affluent taxpayers.

The Retail Industry Leaders Association, comprised of some of the nation's largest retailers, including Wal-Mart Stores Inc, Target Corp and Best Buy Co Inc, praised Trump's call for a lowertax rate and reiterated opposition to the idea of the border adjustment tax. He's never disclosed proof of an audit and tax lawyers say there's nothing preventing him from releasing his returns if he's under one. We already know that some of Trump's campaign advisers had personal financial ties to this frequent USA adversary or its surrogates.

It's unclear just how much the tax overhaul would help Trump because the proposal still amounts to mainly a series of bullet points and because the president has steadfastly refused to release his tax returns despite having promised to do so in the past. The plan would sharply reduce taxes on businesses while also bringing down rates on individual income, with the goal of simplifying the process of filing taxes. Lawmakers said they were enthused that the president is taking an interest in tax reform.

Most states have tied their tax codes closely to the federal code.

Republican leadership in Congress praised the plan in a news release, saying that the principles outlined by the Trump administration would serve as critical guideposts for Congress and the White House. Ron Wyden, or OR, ranking Democrat on the Finance Committee.

It would eliminate most line-item deductions - including those for state and local taxes, sales taxes, gambling losses and moving expense - with the noted exceptions of the mortgage interest deduction and charitable gift deduction.

However, another proposal to repeal state income tax deductions would carry serious implications for HNW clients residing in states with high tax rates such as New York, New Jersey or CT.

Because this plan includes only tax cuts and no offsets in spending, the effect would be an estimated increase in the deficit of between $2-7 trillion over the next decade. The median US household income is slightly above $50,000 annually.

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