The (mostly) good, bad, & ugly in Trump’s tax plan

by | May 2, 2017

The (mostly) good, bad, & ugly in Trump’s tax plan

by | May 2, 2017

Yesterday,  President Trump unveiled  a tax “reform” plan. Here is the (mostly) good, a few bad, and one ugly piece of the plan:

The Good

1. Lowers taxes for millions of Americans;

2. Removes many Americans from the tax rolls;

3. Lowers the corporate tax rate — which is currently one of the highest in the world — to 15%;

4. Increases the standard deduction from $6,300 to $12,600 for individuals, and  from $12,600 to roughly $24,000 for married couples;

5. Reduces the tax rate from 39.5% to 35% and collapses the current seven rate system to three rates of 10%, 25%, and 35%;

6. Allows a one-time reparation to bring millions of dollars of capital into the United States, thus jump-starting job creation and economic growth. (This was also a key feature of Ron Paul’s Restore America Now budget plan.);

7. Provides tax relief for families with child care expenses;

8. Repeals the Alternative Minimum Tax, which was created in the 1960s to squeeze more revenue out of the “wealthy” but now affects many middle-class taxpayers;

9. Repeals the death tax;

10. No VAT;

11. No border tax;

12. Repeals ObamaCare’s 3.8% tax on investment income;

13. Preserves the mortgage deduction, which helps reduce the tax burden of middle-class homeowners, and saves charitable deductions.

The Bad

1. “Pays for” the tax cuts by eliminating numerous deductions that enable Americans to lower their tax burden. The very notion that tax reduction needs to be “offset” with tax increases is rooted in the idea that the government has some moral claim to a certain percentage of your income and can never lose a penny of revenue.

Of course, the main reason tax increases are necessary to offset is because of:

The Ugly

1. Even with the elimination of tax deductions, many are claiming Trump’s tax plan would cause the deficit to skyrocket. Of course, we shouldn’t reject Trump’s tax plan out-of-hand. Instead, President Trump and Congress should work to merge tax reform with spending cuts.

President Trump has made a good start on cutting domestic spending in his proposed budget. Unfortunately, he uses those savings to increase the already bloated “defense” budget instead of using the savings to reduce the deficit and provide meaningful tax relief for the American people.

Here is Tim Carney on the plan.

Republished from Campaign for Liberty.

About Norman Singleton

Norman Singleton is currently a Senior Fellow at the Market Institute. Mr. Singleton worked for Congressman Ron Paul from 1997-2012. Mr. Singleton served as Legislative Aide on Education and Workforce issues for Congressman Paul from 1997-2001, when he became Congressman Paul’s Legislative Director, a position he held until Congressman Paul left Congress in 2013. Mr. Singleton also served as volunteer policy director for the Ron Paul 2012 Presidential Campaign. Prior to working for Ron Paul, Mr. Singleton worked for the National Right to Work Committee. Mr. Singleton graduated Cum Laude from Washington and Jefferson College with a degree in economics and is a 1991 graduate of the University Of Pittsburgh School Of Law. He is also a founding member of the Republican Liberty Caucus.

Our Books

latest book lineup.

Related Articles

Related

In Defense of Inaction

In Defense of Inaction

On March 17, The Wall Street Journal published an op-ed by a woman named Mary Anastasia O’Grady titled, “Giving up on Haiti Isn’t a U.S. Option.” She argues, in short, that Americans don’t have a choice but to continue doing all the things that have failed in the past...

read more
Is America a Rogue Superpower?

Is America a Rogue Superpower?

“Unipolar” used to mean that the United States was, at least in theory, alone in leading the world. Now “unipolar” means that the United States is alone and isolated in opposition to the world. In global affairs, a hegemon is a nation that leads because it has the...

read more
Collateral Murder 2.0

Collateral Murder 2.0

When the footage of Reuters journalists and civilians were Wikileaked to the world, there was outrage. A shame exhibited by some in the American government caused them to reel from the crime that had been exposed, to downplay the prevalence of such murders, and...

read more
The Fed and the Fight for 2%

The Fed and the Fight for 2%

Last week, Jerome Powell & Co. met to issue an immediate decision regarding the status of the federal funds rate for March, and to provide some insight into the trajectory of monetary policy for the rest of 2024 and into 2025. As with the past few inflation...

read more
Truth Has No Chance on Capitol Hill

Truth Has No Chance on Capitol Hill

Americans are encouraged to believe that the U.S. Congress is practically on automatic pilot to serve the public. Happily, most Americans are not so gullible and Congress receives much of the contempt it deserves in public opinion polls. But the media and the...

read more