Posted on 09/28/2015 7:57:43 PM PDT by SeekAndFind
I wrote earlier today how Trump could “surprise me in a good way” over his tax plan, and you know, he did. His personal income tax reform plan for people who don’t have stocks is really simple and something which he should be praised for.
The simplification is really good and is a lot easier than the current system. Good on Trump for doing this. From a personal standpoint, I prefer either a very low flat tax (7%) or zero income tax at all. But the income tax part of Trump’s plan isn’t bad at all. I’m still not sure how those making under $25K will do their taxes and be able to keep their money. The way the current system is set up, people get taxes taken out every paycheck and get their money back from the government after they file taxes. That one page “I win” form Trump talks about in his plan is pure fantasy and honestly leaves his system rife for fraud if it simply means people will pay the taxes they want to pay (although honestly, I’d love to be in that system).
The plan gets a lot trickier when it comes to stocks and the long term capital gains/dividends rate. It’s here where Trump decides to raise taxes, specifically on those who make over $100K a year. Here’s the current tax rate on long term capital gains/dividends per Charles Schwab.
Here’s Trump’s with the focus on the long term capital gains/dividends.
So what Trump is saying is if you earn over $150k a year and have stocks, you deserve to pay more. This isn’t going after hedge fund managers, this is going after people who use their hard-earned money to buy stocks or people who maybe were given stock options when they signed on with a company. This might force single filers right around $150K to decide to sell their stocks to take the short-term financial hit, instead of having to pay more each year. It’s what I’d if I had a stock like Apple or Google or some other high-earning stock and made $150k. I’d sell the stock and stick the profit in a savings account or 401K and just forget about it.
There’s something else about Trump’s plan which no one is talking about- it’s really similar to Jeb Bush’s plan, just slightly smaller in a couple parts. Here’s Bush’s plan.
We will cut individual rates from seven brackets to three: 28%, 25% and 10%. At 28%, the highest tax bracket would return to where it was when President Ronald Reagan signed into law his monumental and successful 1986 tax reform.
Bush’s corporate tax rate is 20%, while Trump’s is 15% (Rand Paul’s is the lowest at 14.5%). I prefer Trump’s over Bush’s, but Paul’s over Trump’s. It’s just amusing to see how similar Bush and Trump’s plans are. I’m not going to be going into the weeds on his repatriation of corporate cash plan because I want to study it a little more. I really don’t think companies should be punished for moving their money overseas. It honestly makes sense for them to want to do this if it saves them money. But I want to study it more before commenting further.
The thing which bugs me the most out of all this is how will Trump pay for everything he wants to do? He’s talked single-payer for low-income families, making the military so strong no one will want to mess with the U.S., and not doing anything to Social Security. He’s already called this tax plan “revenue neutral,” so how will he pay for what he wants to do. This is where Republican keep failing over and over when it comes to balancing the budget and cutting down debt. They get the equation half right with tax cuts, but fail to do the spending cuts needed to chomp away at the debt. I mention Calvin Coolidge a lot, but there’s a reason. He’s the only president in the last 100 years to actually cut spending on a consistent basis, while lowering taxes. George W. Bush didn’t do it and neither did Reagan. Trump and the other candidates have to answer how they’ll save the country money, rather than just yelling, “cut taxes!”
Trump’s personal income tax plan isn’t bad at all, except for the long term capital gains/dividends rate hikes. It’s nice to see him put out a proposal I can mostly agree with, even if I don’t think it goes far enough (but I don’t think any of the candidates’ plans go far enough). I still have concerns about how he’d pay for everything he wants to do. I’m also curious whether those who aren’t supposed to pay taxes would get cash taken out of their paychecks before getting it all back at the end of the tax year. But it’s certainly less Bernie Sanders than he made it out to be on 60 Minutes. Which is a good thing.
Are you PAID to post this utter crap from a moron Blogger website run by the Salem Communication , a DC fat cat front group ?.
Salem which also employs Trump haters Hugh Hewitt, Erik Erickson, Mike Medved, Kathleen Hamm..
You and Salem have a huge agenda !
I was hoping against hope that he would propose something akin to a Flat Tax or even better the Fair Tax. But once again, we have a variation of Woodrow Wilson’s utopian tax plan.
Damn Donald , you are better than that.
Bleh. I take the Cruz version - a flat tax and cut the IRS down to nothing.
As if that would ever happen. No offense to Cruz, but he can’t even get one person to support him to defund Planned Parenthood. Not a single person.
As much as i love trump shaking the bowl, this is garbage and does nothing really. “Son, I am disappoint”
Consider this published plan. Two fudgepackers claiming a child will get less of a hit than two actual people in a real marriage with a real child.
One baby daddy and his slut with an anchor pay less than two committed adults attempting to actually raise their child.
Sorry but with the talk of tariffs, support for expansion of Brady and now this, the donald has pretty much lost my vote. Its tough, because I want someone, anyone, to burn it all down. But not in an Obama way.
I think this author needs to have a capital gain or two and learn how this all works.
As if that would ever happen. No offense to Cruz, but he can’t even get one person to support him to defund Planned Parenthood. Not a single person.
Not bad, but I would prefer a flat rate around 10 - 15% and a break for those at or near minimum wage, say 7%. No loopholes, tax shelters and write offs for big shots, maximum 15% corporate rate, penalties for moving out of the country to avoid taxes or outsourcing jobs.
This is still not bad at all, and I heard someone today (don’t know who, I was half listening) who said Trump is also looking at ways to cut spending and trim fat, he’s a businessman after all, and that’s what he does. You don’t build a business like his by insane out of control spending...
That’s where I think he will make up the difference, people are still not paying enough attention to the fact that he is a businessman first, and cutting cost is one of his strongest suits.
Also, cutting corporate rates will tend to bring back jobs, I’d be willing to bet he will also try to reduce a lot of Obama’s business killing regulations too.
Trump also said he hashed this out with some of the best economists he could find.
Add that up and it starts to look like a better economy overall. Cut tax rates pretty much across the board, eliminate most of the ways to avoid paying anything at all, bring back jobs and incentive to expand, innovate and create jobs, cut back frivolous spending, and it starts to look pretty doable.
So, selling your stocks and paying 25% on income makes more sense than holding a winner and paying 20% Capital gains... ?
Am I suddenly bad at math?
Seriously, what am I missing?
It seems to me there is a small band of crossover where the rate on regular income comes down, but the capital gains rate goes up. It would absolutely depend on the individual financial situation, but there does appear to be a narrow set of folks who could pay more.
An example would be those single folks, making more than 150k, but less than 189k, and who’s qualified, non tax deferred, capital gains are roughly 38% or more of their annual income. Even among those with significant portfolios such a situation is rare, not impossible, but rare. A similar narrow band of married folks, making between 300k and 454k, who’s capital gains account for more than 72% of their income could also be found. Far from impossible, but also extremely rare.
Perhaps the numbers could be tweaked to eliminate these bands. My first gut take is that if I crunched the numbers a little deeper the reduction in rates for the lower tiers would further narrow these bands.
That said, the situation posited by the author still makes little sense to me.
“Bleh. I take the Cruz version - a flat tax and cut the IRS down to nothing.”
That would be nice, but you would never get elected... Lower income people haven’t paid taxes in a generation, and are not going to vote for someone that proposes it. You need the votes of some of them to win.
Am I suddenly bad at math?
Seriously, what am I missing?
I believe what he's saying is that selling the stock and paying a ONE TIME income tax and then investing the money into a non taxed vehicle to snowball is better than paying a percentage tax on the dividends every year (if you make over 150k).
I thought Trump’s plan eliminated the marriage penalty. Guess I will have to go back and read it again. Regarding tariffs, I used to agree they were a bad thing, but we are observing our industrial base being dismantled and sent overseas to third world communist nations. This is a terrible national security threat, not to mention economically devastating. If we ever are forced into a war with these nations, just how will we defend ourselves with our factories gone.
I am with ya on that. I don’t understand why the Trump plan get more support than the more Constitutional plan of Cruz. We have one shot at a True Constitutional prez... Cruz understands the actual procedures and processes...
I am glad to finally see something in writing from Trump... Is the Jeb Bush comparison necessary?
Wouldn’t it be easier to say... You have two choices... End the IRS slavery and go flat... Or invoke RR and just put a bandaid on it. RR did well.. No doubt about it.. but we could do better and he would look down from heaven and say... Way to go... Don’t give those liars an inch.
How is the analysis wrong?
Trump wants to cut out the stuff we waste money on. I am all for that. Like Trump said I pay a lot of taxes, it’s how they spend it! Yes my attitude about paying would improve if the money were well spent. He mentioned the one million taxpayers just spent for a soccer field at Gitmo!!
RE: You have already posted the lies and pure crap from a know nothing DC blogger at DC rhino blog !
Are you PAID to post this utter crap from a moron Blogger website run by the Salem Communication , a DC fat cat front group ?.
______________________
The problem with you “Trump is the Coming of the Millenium” folks is you are too invested in one person because of his ability to roil the establishment that you ignore the fact that he isn’t the sort of conservative you expect him to be.
Here’s my proposal for you.... why don’t you attack the author’s analysis and tell me where he’s wrong.
THAT is the reason why I post “crap” ( note the quotes ) like this... in order to elicit your counter-attack on the content of the article.
Alas, such is not forthcoming.
RE: Bleh. I take the Cruz version - a flat tax and cut the IRS down to nothing.
A flat tax will not cut the IRS down to nothing. It will cut the IRS down, definitely, but won’t eliminate it.
And I am still waiting for Cruz’s tax plan.
I was robbed on the current rates last year, and Trump’s plan would lower my taxes. Just a fact. I’m middle class and not wealthy, but well off.
Again,I’d have to see math on a specific situation... still sounds odd
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