Of course, I haven’t seen one word of the statute proposed, but there are some interesting things in this plan. (1) Lowering Corporate rates and repatriation tax, evening out small business income rates to lower their rates. This is not trickle down if they also attack the huge tax penalty on small businesses. Currently an LLC has a maximum effective rate of 39.6% and unlike large corporations, profits cannot be deferred easily. Also many times this income is subject to self-employment taxes to the effective rate would be closer to 48% plus state taxes. So, obviously the devil is in the details, but this could be a huge benefit for jobs if done. (2) Eliminating deductions. This will have a negative impact on middle income taxpayers in the following ways. Tax deductions (except for Mortgage interest and charitable) will be eliminated. This effectively increases income and property taxes for the amounts taxpayers pay to the States. This may make people pay more attention to the amounts being paid to their states and localities and put some pressure on the states and localities to reduce taxes themselves. This eliminates employee business expenses which means that those deductions for workers who have to buy tools or uniforms will be hit. This also eliminates medical deductions. So, if mom is in a nursing home and having to pay $100,000 a year in long term care expenses, she will not be able to deduct it under this plan. I suspect this will be one area that gets some pushback from Congress. (3) Capital gains rate reduction and elimination of 3.8% surtax on unearned income is geared toward higher income taxpayers. (4) Elimination of estate taxes is popular with Farmers and Small to medium sized businesses whose values are close to $10 Million. So, we’ll wait for the details. But some interesting proposals for sure.

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