State, Local Governments Are Not Feeling Trump's New Tax Plan

President Donald Trump's team boasted Wednesday that its tax-cut plan would lighten Americans' financial burdens, ignite economic growth and vastly simplify tax filing.

President Trump announced Wednesday plans to carry out a tax reform calling for big corporate rate cuts, a simpler tax code and big increases in standard deductions.

Yet the proposal so far remains short of vital details, including how it would be paid for.

Trump's plan would replace the current seven income tax brackets with three, and the top bracket would drop from 39.6 percent to 35 percent.

But the state and local groups said in a statement that the deduction should be preserved because it gives municipalities the flexibility to provide services to their residents...

- Repeal of the Alternative Minimum Tax, which had forced wealthier individuals to pay higher bills, and the estate tax, which Cohn and others described as "the death tax".

President Trump should release his own tax returns if he wants to have any credibility in a debate about America's tax code.

Parents who pay for day care will be afforded more tax benefits.

The proposal also calls for doubling the standard deduction.

"You don't know what the bracket cutoffs are, so you can't compare them to current law", said Alice Abreu, a tax law professor at Temple University.

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The National Association of Realtors criticized Trump's tax plan for eliminating other benefits, such as the state and local tax deduction.

"Trump is the king of pass-throughs", said Steven Rosenthal, a senior fellow at the nonpartisan Tax Policy Center. "This is part of his big impact for the first 100 days".

She said many of her clients who took out large home mortgages planned their entire finances around their tax deductions, and would flee California rather than pay the sky-high property taxes without being able to deduct them. So it's impossible to say what the change would mean in dollars and cents for anyone. "They'd leave the state". "It's not going to make a difference to the one that doesn't pay taxes already".

The administration is also proposing to tax only corporate income earned in the United States. Therefore, we are going to return the top capital gains tax rate and dividend rate to 20 percent, repealing the harmful 3.8 percent Obamacare tax on dividends and capital gains. "The president has released plenty of information and I think it's given more financial disclosure than anybody else and the population has plenty of information", Mnuchin said Wednesday when pressed at the briefing by ABC News' Jonathan Karl on whether the USA public has the right to know what's in Trump's tax returns.

The administration's tax outline still leaves many questions unanswered and will be met with a lot of skepticism among lawmakers, even though Republicans control Congress. As of the end of September, Apple had $216 billion overseas; Google had $48 billion; Cisco had $60 billion; Oracle had $51 billion; and Microsoft had $111 billion, Moody's reported in November.

"In order for a corporate income tax cut to 15 percent to be self-financing, it would have to raise the level of growth to 2.8 percent on average", said Alan Cole, an economist at the Tax Foundation, adding most economic models would not expect the tax cuts to boost USA growth by additional 0.9 percentage points over the 10-year budget window. Most, if not all, of Trump's hundreds of businesses are considered pass-throughs. A lower US corporate tax rate would definitely affect Canadian business, he said, but fixating on the rate alone would be overlooking other opportunities. The proposed 15 percent rate on corporate taxes may be only a starting point for negotiations, but a tax rate even in the 25 percent range would mean fatter after-tax profits for companies, which could propel their stock prices even further.

One of the key numbers to be worked out is the exact tax rate on the trillions of dollars now parked overseas by large companies like Microsoft and Apple to avoid paying US corporate income tax.

Implementing the plan will depend on hard-to-come-by support from the US Congress without clarity on how tax cuts will be funded, as well as coming up against rules aimed at preventing tax plans that will add to the US federal deficit in the long term.

If Britain crashes out of the European Union without a new trade deal with its biggest export market, politicians have hinted that it could cut taxes on businesses even lower to boost investment.

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