I voted for Trump! I have spoken personally with him around 5 times and he has always been very personable with me. I like his Family and we are so glad to be praying for him daily instead of Obama. I support him as our President.
That said can someone please tell me how The President’s Tax Cut Proposal is “fair and balanced?”
From what I can see from reading Fox, WSJ and CNN The President proposes cutting Corporate Taxes by 57% and 62% as follows:
1. The Max Corporate Rate for “C” Corps is 35% and the proposal is to cut it to 15%. Here’s the math: 35 – 15 = 20 / 35 = 57.14%.
2. The Max Corporate Rate for “S” Corps is 39.6% and the proposal is to cut it to 15% – a 62% cut: 39.6 – 15 = 24.6 / 39.6 = 62.12%. S corps are specialty incorporated business where the net income from the business flows directly from the balance sheet to the individual(s) that own the S Corp. Hence the max rate is 39.6%, which is the highest individual tax rate. Some S Corps are small businesses. Some are big businesses structured like President Trumps to avoid paying the C Corp tax and then the Max Personal Tax on the Dividends.
On balance if my math is right this is an approximate 60% tax cut for Corporations! A sixty percent tax cut for corporations! Please let that sink in.
Yet people who are JUST out there in the working class, middle and upper middle income class and retired folks on investment income are going to get a tax cut that seems to average less than 10%. Throw in the loss of property tax deductions and that 10% Tax Cut gets a lot smaller fast!
When I voted for Trump and the topic of taxes came up I was thinking everyone would share equally in the cuts – not equal in money but in the percentage of the cuts. 57% and 62% don’t seem anywhere in the ball park of equal with 10% or even less.
I may be wrong but I haven’t seen anything about doing away with Corporate Deductions – such as ITC, Accelerated Depreciation, etc. However, I do see that I will no longer be able to deduct the taxes I am paying to my Local and State Governments. To quote a friend of mine “this just burns my butt!” When I pay my property tax – and for the people who live in states with state income taxes – we don’t get to keep that money – it is GONE! Eliminating the set aside or Deduction is nothing more than “double taxation.” The Feds under this proposal are going to tax me on money I don’t even have? What kind of sense does that make?
It seems to me the people I see winning big in our President’s Tax Cut Proposal are: C or Regular Corporations and Sub S Corporations (Like our President’s) while the rest of us – including our children and grand children are going to be left picking up the check for the increased deficits these Corporate tax cuts will generate. I read one report from a Republican that for every 10% we cut the corporate tax rate we increase the budget deficit by one Trillion Dollars.
Then again who cares about working, middle and upper middle income workers, retired people and our children and grand children? I desperately hate to say it but I am shocked by this tax proposal coming from President Trump – a person who was elected by the working, middle and upper middle income workers and retired people. Simply stated this seems to me to be a sell out for his base and a buy in for the corporate world.
Uncle Larry's Blog 
Larry, I am not an economist but as you know I did do a little bit with taxes over the years. Couple of points to consider. First, corporations really don’t pay taxes but rather are a cost of doing business. Like any other cost, it is passed through to their customers in the form of higher prices. Second, the US has nearly the highest tax rate in the world which I believe reduces the attraction of foreign investment in the US. Thirdly, no one talks about the reduction in taxes paid to the government resulting in that money being retained by the people and companies which can be used to grow the economy. Finally, deductions are less valuable if you substantially reduce the tax rate. With the proposal to double the standard deduction to $24,000, many people will no longer be itemizing anyway. As you saw under Reagan when he cut the tax rate from 70% to 28% tax revenues doubled. I’m hoping for a similar result if only Congress can manage spending. Just a few things to consider.
Jeff, Great to hear from you! As always your work in well thought and written and filled with enthusiasm for the best case scenario! Thanks, Larry
Hi Larry, thought you’d be interested in this email I received about the same time as yours……..
Best—
* “The Trump Administration announced the President’s tax plan yesterday.
* I didn’t understand much of what it says but I’ve been in Washington long enough to known that a major change in tax law is likely to be more than the 207 words the official announcement was yesterday.
* As T. Boone Pickens (about whom, more later) once said: “A plan without action is just a speech.”
* As presented by Treasury Secretary Steve Mnuchin, it was clear there is no plan to implement this.
* All the document said was that the Administration would “hold listening sessions with stakeholders” throughout the month of May “to develop the details of a plan.”
Sounds like Trump may have someone in the batters box – with no one on base and he and the team have the rally hats on!
The plan to implement is not done by just the president. There will be a bill which will have input from both parties and then both the house and senate will need to vote on the plan, then you will see the implementation. You’re just used to the past 8 years when the president simply bypassed congress. Won’t happen this time.
The President can proposed any tax law , when it passes the Congress and Senate .. he won’t even recognized it …by the way when a tax law passes ….all the CPA’s, including my hubby,tax lawyers love … it creates so much confusion and that brings money . For me , it is never a good law for taxes … like a pizza pie the tax law depends how this is cut …someone pays more others will pay less
Sometimes , it is good to be like me … simple ( not to have $ )
Again, my English is not good but .., I wanted to comment …just don’t worry about …
Mr. Larry I love your blogs
I believe we shall see soon enough when Congress comes back after the Labor Day break.