Trump's busi­ness tax cut seen as ma­jor boon for top 1%

Swazi Observer - - NEWS -

WASHINGTON - De­spite Pres­i­dent Don­ald Trump’s state­ment this month that “the rich will not be gain­ing at all,” the tax plan that the White House and Repub­li­can lead­ers rolled out may con­tain more than $1 tril­lion in breaks for the high­est earn­ers and the wealthy - at least without rev­enue off­sets that re­main largely un­spec­i­fied.

“This is a huge tax cut for the top one per cent,” Leonard Bur­man, Di­rec­tor of the Ur­ban-Brook­ings Tax Pol­icy Cen­tre, said on Wed­nes­day after de­tails of the plan emerged. “Im­pos­si­ble to square with the pres­i­dent’s rhetoric.”

The tax frame­work sets up some sus­pense over where Congress will set the top in­di­vid­ual in­come-tax rate - giv­ing law­mak­ers flex­i­bil­ity to set it higher than the 35% men­tioned in the doc­u­ment.

But an­other pro­vi­sion, which would slash the rate paid by own­ers of part­ner­ships and lim­ited-li­a­bil­ity com­pa­nies, is seen as a po­ten­tial bo­nanza for peo­ple at the top of the in­come scale. The frame­work calls for cap­ping the tax rate on such pass-through busi­nesses at 25%. Busi­nesses or­gan­ised that way don’t pay in­come tax them­selves, in­stead pass­ing earn­ings to their own­ers, who pay at their in­di­vid­ual rates. Own­ers with high busi­ness in­comes, who cur­rently face a top rate of 39.6%, are in for ma­jor tax re­lief, pol­icy an­a­lysts said.

In de­scrib­ing the newly pro­posed tax rate, the frame­work cites its im­pact on “small and fam­ily-owned busi­nesses,” but pass-through en­ti­ties range from mom-and-pop gro­cers to ma­jor, closely held busi­nesses, in­clud­ing Trump’s com­pa­nies.

The tax plan is “not good for me, ”,Trump said on Wed­nes­day dur­ing a speech in In­di­anapo­lis to rally sup­port. news24

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