It would bestow nearly all of its benefits on the Republican donors at the very top of the income ladder, and it would pay for some of this largesse by actually raising taxes on the Republican voters a couple of rungs below that. But it wouldnt be to point out that there was a class divide, just based more on education than income. But a key provision would slash tax rates for a special kind of business set up by owners of profitable firms, including Trump and his family.The GOP tax blueprint would cut rates for businesses whose profits are taxed at the owners' personal income rate, with proponents casting it as tax relief for small business. Likewise, there are many critics of the overhaul such as Maya MacGuineas, president of the Committee for a Responsible Federal Budget who states that "This is a massive tax cut with an insufficient plan to pay for it".
Rep. Chris Collins (R-NY) said October 4 that key GOP members have signaled to him the state and local tax deduction will be preserved in some form. His proposal will also boost economic growth, which in turn will produce jobs.
Tax policy is often complicated. He wants to create a homeowner deduction, which would basically merge the current mortgage interest deduction with the property tax portion of the SALT deduction. Find the red lines that these senators have put forward in their past statements and on the campaign train in the past, stack their town meetings with people saying, "Why are you going back on your promise to not increase the deficit?"
In trying to broker compromises on issues like SALT, tax writers will likely be giving up some of the revenue potential of various pay-fors they've been eyeing. It's touted as plan for the middle-class but delivers a boon to the wealthy, throws a comparative pittance to everyone else and even includes a dose of tax increases for some middle- and upper-middle-income taxpayers. Repealing some business tax preferences and closing loopholes would add another $393 billion to federal coffers. However, home-owning middle-class families in California could get hammered. Ninety percent of high-achieving, low-income students who attend selective colleges receive degrees, compared to 56 percent of similar students who enroll at less competitive schools.
What's the argument for the SALT deduction? This distorts the meaning of the term in an Orwellian fashion.
From the perspective of multinational corporations, our tax system has two problems.
They understand this because many of them own corporations. Furthermore, non-corporate taxpayers, including most mom-and-pop businesses, would see their taxable income increase. Secondly, we tax the capital gains. This income is taxed again when the company chooses to transfer income to shareholders by way of dividends. Yet their struggle for a governing consensus demonstrates long-term vulnerability in an economically complex, culturally diverse 21st century America. This is double taxation: an individual paying a tax on the same income twice to an identical governmental entity.
The smallest tax increases from elimination of the SALT deduction would be in Alaska ($992), Wyoming ($943), and Tennessee ($938). Perhaps it's time for the "Big Seven" to actually read the Federalist Papers they enjoy misquoting. And our state is the largest net donor to the federal government.
CNBC estimates that US companies hold $2.6 trillion of cash offshore. Little overlap is meant to exist in the responsibilities of these two realms of government. It received 5.9 percent of federal spending allocated to the states. But states such as North Dakota, South Carolina, Alabama, Kentucky, West Virginia and IN get more than two dollars back IN federal spending for every dollar IN taxes. Either way, when I loaned money to government, I lost no capital; when I was taxed instead, I did shed capital.
Individuals benefit from the proposed plan both directly and indirectly. Those who suggest otherwise do so out of ignorance or intentional misrepresentation of our Constitution. The administration tax plan does not target "all" of the deductions that mostly wealthy people use. It seems, at least in the short run, it can be more politically palatable. Indeed, this is a positive!
Reducing the corporate tax rate is important, because if the rate is too high, businesses will either 1) fail to start up or succeed in the United States or 2) businesses will relocate to other countries, to hire and invest overseas. Additional accountability should be welcomed.
Many of these fiscal hawks think of taxes as the government's revenue that can be spent responsibly and look at debt as a somewhat illegitimate means to fund the government.
In 2017, the SALT deduction is estimated to reduce revenue to the federal government by almost $60 billion.