Last week, President Trump released his long awaited tax plan. Which, in classic Trump form, he’s billing as the biggest individual and corporate tax cut in American history. There is only basic information at this point, but most of the elements are positive and aimed at two major goals: simplifying the onerous tax code and reducing the corporate rate. Here are the highlights:
- Reduce tax brackets. Trump’s plan would pare down the seven existing brackets to just three: 10%, 25%, and 35%.
- Double the standard deduction. From $6,300 to $12,600 per individual.
- Repeal the Alternative Minimum Tax and estate tax, in addition to eliminating targeted tax breaks.
- Cuts the corporate tax rate from 35% to 15%.
- Promises a level playing field for American companies and an end to tax breaks for special interests.
Of course Trump’s plan doesn’t go nearly far enough. Taxation is theft by nature and any amount greater than zero is too high. But any plan that reduces and simplifies the over 75,000 pages of federal tax code is a good start. It’s also to interesting to note that this is not a tax revenue neutral plan, which means federal tax revenue will decrease an estimated $7.5 trillion. A good thing, as it gives them less money to inflict damage on the citizenry.
The biggest problem isn’t what’s in the tax plan, it’s what’s not in it: any sign of spending cuts. Not a good sign, since that means that money will most likely be financed via the usual means: deficit borrowing and the inflationary practices of the Fed.