As the November elections approach, all eyes are on the candidates and their proposed tax policies. Here’s how wealthy households are looking to benefit from Donald Trump’s tax plan.
Donald Trump is certainly no stranger to controversy. For example, his guilty verdict in the recent hush money trial and his policies also attract much debate. In 2018, while serving as president, Trump signed into effect the 2017 Tax Cuts and Jobs Act (TCJA), which happened to be the largest overhaul of the tax code in decades. Cutting corporate tax rates has resulted in the highest earners benefiting from these rates the most, but the expiry date of this act is coming up in 2025.
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In his proposed tax policy, Trump plans to make the expiring tax cuts for estate and wealth taxes from the TCJA permanent, including individual income taxes. These 2017 cuts in income tax rates have greatly benefited wealthy households, small business owners, and people investing in the real estate industry. For example, The Washington Post revealed that during 2018, the wealthiest 20% of taxpayers received an average of $7,600 in savings, whereas middle-income taxpayers only saved $930.
The highest income bracket saw a tax drop of 39.6% to 37%, while the lower brackets remained unchanged. Others who have benefited from this tax plan include owners of pass-through businesses, who saw a 20% deduction for pass-through income and corporate tax that dropped from 35% to 21%.
If elected in November, Trump’s plan is to keep these tax rates permanent and wealthy households will benefit from these $10 – $12 trillion tax cuts. But what about the middle class? Trump’s TCJA also created some benefits for middle-income households, like raising the standard deduction for the 2024 tax year, increasing the child tax credit to $2,000 and creating an additional nonrefundable $500 credit for non-child dependents.
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Compared to Joe Biden’s proposed tax plan, which sees an increase in the highest income bracket tax rate to 39.6% (Trump’s is 37%), wealthy households could use these figures to determine who to vote for in elections. It’s not just wealthy households whose tax rates may be in for an unwelcome change as Biden proposes to increase the corporate income tax rate to 28%. However, Biden’s proposed tax plan does offer some additional benefits for the middle-income by increasing the child tax credit to a generous $3,600 for young children and $3,000 for older children, which is fully refundable.
Trump’s 2017 tax policy received backlash because it was geared to benefit the wealthy and businesses, so this time round, Trump’s campaign team has revealed that Trump is working on securing additional tax cuts for working-class Americans. An economic advisor to Trump, Stephen Moore, told the Washington Post, “In my most recent conversations with the president, he said that he really wants to focus more on small businesses than corporations. It’s quite possible that tax changes would be on the business side, more toward helping small- and medium-sized businesses.”
While there is no official word on whether corporate tax rates will be dropped as well, some of Trump’s senior economic policy advisors have spoken about this, revealing that Trump is very interested in cutting corporate tax rates again. During an interview on NBC News’ Meet The Press, Trump was asked whether he would cut the corporate tax rate to 15%, to which Trump responded, “like to lower them a little bit if we could.”
Could Americans be in for more tax cuts if Trump wins elections?
At a rally, Trump exclaimed, “And with your vote in this election, we will cut your taxes even further.”
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This article Wealthy Households Looking To Benefit Most From Trump’s Proposed $10 — $12 Trillion Tax Cuts originally appeared on Benzinga.com
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