Republicans still don’t understand why their plan raises taxes on many middle-class families
Bloomberg reports President Donald Trump was angry to learn his tax plan would raise taxes on some middle-class families, and that Republicans will look to address Trump’s anger by adjusting their proposal to repeal the deduction for state and local taxes.
Trump is right to be concerned, but he apparently still doesn’t fully understand the problem.
The Tax Policy Center estimates that 12% of taxpayers would pay more tax under the Republican plan than under current law if it were imposed this year, and that the bite would get worse over time, with 25% facing a tax increase relative to current law by 2026.
Some people with truly moderate incomes would see their taxes go up, but upper-middle income taxpayers would be the most likely to face a tax increase. And as Barack Obama learned, you will not like what happens when upper-middle income voters think you are coming for their tax breaks.
But the main culprit behind the tax increases on middle- and upper-middle income families is not the proposal to raise $1.3 trillion by abolishing the state and local tax deduction.
The main issue is the plan’s abolition of personal exemptions, a change that would raise $1.6 …read more
Source:: Businessinsider – Finance