Former President Donald Trump proposed a set of tax policy initiatives, including expanding the provisions of the 2017 tax discounts and jobs (TCJA), which is scheduled to end, replace government and local taxes (Salt), reduce corporate tax, the local production rate, and exemption Some types of income of taxes, eliminate green energy tax credits, and introduce a large new tariff.
Some tax proposals of Trump are constructed carefully and can serve as effective mechanisms to enhance continuous economic growth. However, certain aspects of his tax proposals are not organized sufficiently and the deterioration of the Safety of the Tax Law with a minimum impact on long -term economic growth, including exemptions for advice and social security income.
The effects of revenue for Trump's tax proposals
There are some The effects of work tax under Trump 2.0 This can significantly affect taxes and tax interest files. The five important tax cuts suggested by Trump include excluding advice and social security, paying additional work from income tax, and creating a detailed discount for the benefit of car loan; The company's tax rate reduces 15 percent for local production. These measures will contribute an additional 2.5 trillion dollars to the expected revenue for a decade.
The construction of the individual provisions of the tax and job discounts law (TCJA) will lead to a decrease in revenues of $ 3.4 trillion if the local SALT (SALT) is maintained. On the contrary, if the individual rulings are extended without imposing the maximum salt, this will contribute an additional amount of $ 1 trillion to drop revenue for 10 years, and its peak reached the reduction of the total revenue of $ 4.4 trillion.
The potential impact of Trump's tax proposals
In the official evaluation of the main proposals, revenues were expected to decrease by $ 3 trillion under traditional measures with a holy $ 2.5 trillion under dynamic measures from 2025 to 2034. The proposals placed can be explained in a wider context. For example, the exemptions related Additional work tips and advice It can extend to salary statements and income tax.
Trump plans to transfer the United States to a tax system based on residency for individuals residing abroad, allowing them to avoid adhering to providing and paying US income tax. This initiative is expected to reduce federal revenues by about $ 50 billion to $ 100 billion over a decade on a traditional basis. Although this reduction in revenue is likely to be compensated by a new income created from transitional taxes or fees related to the new system, Trump has not provided specific details about these measures.
Taking into account these potential additional tax cuts, Trump's tax proposals may lead to a decrease in revenues that increase the twice the amount proposed by our officially evaluated estimates, which may lead a decade.
The effect of definitions
To analyze Economic effects of definitionsThey consider the taxpayer on imports to the United States. This classification of definitions creates a variation between the price paid by consumers and the price received by the producers. Consequently, definitions reduce the revenues available to companies to compensate for their employees and shareholders, leading to a decrease in real income.
The biggest benefits of the tax and job discounts law (TCJA)
TCJA significantly reduced the average corporate tax to 21 % as a maximum for C. C. , To exclude up to 20 % of their business income. TCJA also reviewed the rules related to the consumption of rewards, allowing 60 % of the accelerated consumption in the first year of the specified fixed assets that begin in 2024, with this percentage decreased by 20 % each year later until it reaches zero. In addition, TCJA has created opportunities to enhance economic investment in unexploited areas through tax incentives.
How to change income taxes
Trump has suggested a simplified tax structure with just average: 15 % for low owners and 30 % for individuals who earn more than $ 170,000 annually. In his plan, he aims to reduce the number of tax brackets and pointed out the desire to eliminate most discounts, credit and exceptions. Trump's focus is to simplify the tax declaration process and reduce the financial burden on the US government -related government. While this approach may reduce some complications during the tax season, this may lead to an increase in the total tax burden of individuals.
“No tax on tips” is more complicated than it seems
Trump's commitment to the “lack of tax on tips” has committed great attention to the media. However, the Budget Laboratory at Yale University mentioned, this procedure will only affect a secondary segment of the workforce: approximately 2.5 % of the total employment, moreover, more than a third of the employees who suffer from this get low wages that are done Exempt them already from the federal income tax. Details of how this proposal is not clear.
The appropriate question is whether this exemption applies only to income taxes or whether it will extend to salary statements as well. Removing taxes on tips can lead to unusual consequences. For example, a trees trim, which usually receives $ 500 for its services, may modify its prices to $ 300 per job with a $ 200 dollar advice, knowing that it will not be subject to taxes. This can lead to an increase in the transformation practices in industries as it was not traditionally prevalent. In addition, employers may seek to reclassify their employees as full workers, reducing their wages to the minimum wage, which is currently determined at $ 2.13 per hour at the federal level. Exempting advice from taxes would create a large gap in the federal budget, which may cost an estimated $ 100 billion during the next decade.
The effects of this change will be significant, which negatively affects individuals who are still several years of receiving social security. A large part of the tax collected for social security is allocated directly to the Social Security Fund. Therefore, removing these taxes will lead to a decrease in social security financing.
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