We have a new President, and while some of you may not be happy with the outcome of the election, Donald Trump is the President-elect. The great thing about America, unlike communist Cuba where my family is from, is that people are allowed to vote. We are also allowed to protest as long as it doesn’t cause physical harm to others. Protesting is our right, but the flag burning and rioting have got to stop. It’s dangerous and disrespectful!
Now that I got that off my chest, it’s time to talk Trump and money. Last week, I shared with you an overview of the top four candidates positions on taxes. Now that Donald Trump is our President-elect, it’s time to take a closer look at his tax plan.
The one thing we know is that Donald Trump has promised to cut taxes, especially for the middle class and small business owners. Here’s a look at how he says he’ll do that:
- INDIVIDUAL INCOME TAX RATES – The Trump Plan will collapse the current seven tax brackets to three. If you’re married, file jointly and make less than $75,000 a year, you would pay 12% in taxes. Households making more than $75,000 but less than $225,000 would pay a 25% tax rate. Experts say that means households making $48,000 to $83,000 would have their taxes cut by about $1,000, or 1.8 percent of their after-tax income.
- SMALL BUSINESS OWNERS – Donald Trump has said he wants to cut taxes for small business owners to a special 15 percent tax rate.
- TOP EARNERS – Trump says people making more than $225,000 would be taxed at a rate of 33 percent. Those making more than $3.7 million, or the top 0.1 percent of earners, would also receive an average tax cut of more than $1 million in after-tax income if they are business owners. This is because they can also take advantage of business tax cuts. Trump believes this is fair because they would still be included in the 33 percent top tax rate for well-paid wage earners.
- ESTATE TAXES – The Trump Plan includes a repeal of the death tax. However it states that capital gains held until death and valued over $10 million will be subject to tax to exempt small businesses and family farms. In other words, the tax on capital gains above $10 million would have to paid only when, or if, the assets were sold. The Trump Plan says no matter how big an estate is when a person dies, the estate will owe no taxes. However, to prevent abuse, contributions of appreciated assets into a private charity established by the decedent or the decedent’s relatives will be disallowed.
- CHILDCARE TAX CUTS – Donald Trump plans to reduce the cost of childcare by allowing families to fully deduct the average cost of childcare for up to four children under the age of 13. The deduction is available even to families with stay-at-home parents. The exclusion will not be available to taxpayers with total income over $500,000 (Married filing jointly).
The Trump Plan includes other specific deductions. You can read more about it at www.donaldjtrump.com/policies/tax-plan if you want more detailed information.
I guess we’ll have to wait and see who Donald Trump appoints as Secretary of the Treasury and the actions he truly does make when it comes to our taxes and the economy. Until then, can’t we just get along?
Have a wonderful week!