A TAX PROFESSIONAL FOR TAX REFORM   

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Reports and updates on developments related to federal tax reform:



*  Check out some of my suggestions for tax reform - here, here, and here


* Professor Annette Nellen provides a detailed analysis of the June GOP tax proposals in "House Republicans Offer 'A Better Way' for Taxes".


* Howard Gleckman from TAX VOX tells us “Taxes Are Not a Thing for Democrats This Year” –

 

The {2016 Democratic Party platform} makes no call for fundamental tax reform, and includes no coherent framework for an efficient tax code. Mostly, it just says rich people and corporations should pay higher taxes.”  

 

Clearly the Democrats are wrong when it comes to federal tax policy.

 


* At the Tax Policy Center’s TAX VOX blog Howard Gleckman discusses “What the GOP Platform Says About Taxes”.

 

Thankfully, the GOP official party platform on taxes rejects much of Trump’s alleged policies –

 

It endorses a territorial tax system that Trump rejects. It calls for eliminating special interest tax provisions while Trump would retain most.”

 

Here is what the platform says about tax reform (highlight is mine) -

 

The current tax code is rightly the object of both anger and mockery. Its length is exceeded only by its complexity. We must start anew…. It cannot be engineered from the top down, but must have a common sense approach, and be simplified. Wherever tax rates penalize thrift or discourage investment, they must be lowered. Wherever current provisions of the code are disincentives for economic growth, they must be changed. We will not divide the American people into winners and losers. We will eliminate as many special interest provisions and loopholes as possible and curb corporate welfare, especially where their erosion of the tax base has created pressure for higher rates.”

 

Clearly the Republican policy on income taxes is the better choice.  Unfortunately the party’s Presidential candidate is the worst possible choice ever.

 


* House Speaker Paul Ryan released a “blueprint for tax reform”, an installment in the Republican’s “Better Way” agenda.

 

The TAX FOUNDATION has published an overview of the “Details of the House GOP Tax Plan”.  The full plan can be downloaded by clicking here.

 

According to the TAX FOUNDATION summary, the plan -

 

·      Consolidates the current seven tax brackets into three, with rates of 12 percent, 25 percent, and 33 percent (see table at TAX FOUNDATION).

 

·      Provides a 50 percent exclusion of capital gains, dividends, and interest income. This is equivalent to taxing capital gains, dividends, and interest income at half the rate of ordinary income: with three brackets of 6 percent, 12.5 percent, and 16.5 percent.

 

·      Increases the standard deduction from $6,300 to $12,000 for singles, from $12,600 to $24,000 for married couples filing jointly, and from $9,300 to $18,000 for heads of household.

 

·      Eliminates the personal exemption.

 

·      Creates a $500 non-refundable credit for dependents who are not children.

 

·      Increases the child tax credit to $1,500 per child, the first $1,000 of which is refundable, as under current law.

 

·      Raises the phaseout threshold for the child tax credit for married households from $110,000 to $150,000.

 

·      Eliminates all itemized deductions besides the mortgage interest deduction and the charitable contribution deduction.

 

And

 

·  Taxes income derived from pass-through businesses at a maximum rate of 25 percent.

 

·  Allows the cost of capital investment to be fully and immediately deductible.