A family earning $100,000 would pay ZERO on the first $50,000 and only 10% on the next $50,000. That's $5,000 in taxes, not $20,000.
Here is the rate schedule. Try it again.
Posted on 09/28/2015 8:18:50 AM PDT by Helicondelta
Republican presidential candidate Donald Trump plans to unveil an ambitious tax plan Monday that he says would eliminate income taxes for millions of households, lower the tax rate on all businesses to 15% and change tax treatment of companies’ overseas earnings.
Under the Trump plan, no federal income tax would be levied against individuals earning less than $25,000 and married couples earning less than $50,000. The Trump campaign estimates that would reduce taxes to zero for 31 million households that currently pay at least some income tax. The highest individual income-tax rate would be 25%, compared with the current 39.6% rate.
Many middle-income households would have a lower tax rate under Mr. Trump’s proposal, but because high-income households generally pay income tax at much higher rates, his proposed across-the-board rate cut could have a positive impact on them, too. For example, an analysis of Jeb Bush’s plan—taxing individuals’ incomes at no more than 28%—by the business-backed Tax Foundation found that the biggest percentage winners in after-tax income would be the top 1% of earners.
(Excerpt) Read more at wsj.com ...
You are treating deduction as tax credits. Furthermore, mortgage interest and charitable giving are included in the Trump plan.
I believe this would be great to be combined with elimination of the EIC, as there’s no disincentive to earn up to $50,000 due to income taxes overhead.
It is also synergistic with reduction in all welfare benefits, and when further coupled with kicking illegals out, it could do wonders.
I like the idea of forcing everyone to file taxes, even if they default to no tax or 1% tax for everyone. And welfare benefits need to start being counted as income. It’s a benefit and not a donation.
Yep. But Reagan also knew that historically there was a takings line beyond which the benefit outweighed the return. Solon had it just about pegged in his reforms in ancient Greece when he came up with his fifths plan.
A fifth for seed.
A fifth for government
A fifth for sale
A fifth for food
A fifth for the beasts of burden
(Something like that, or so I remember from a history class about a gazillion years ago) Beyond that and you upset a necessary balance.
Yes, but I personally feel that we shouldn't be paying accountants significant sums of money because the tax code is complex, and it shouldn't be that the person with the best accountants and better ability to find the shelters and loopholes pays the least. I absolutely support tax-deferred and tax-free savings etc., but the rules have to be more straightforward. I think most people would be shocked by some of the ways it's possible to avoid taxes.
My point is that the RATE doesn’t matter and never has.
All that matters is how much money comes out of your pocket when all the dust clears.
Here is another example without all the complexity of the tax system to confuse things:
You go into a store to buy a TV.
The TV is regularly priced at $100
The salesman gives you two options.
1 - You can pay the full price of $100 and he will allow you to use a 50% off coupon.
or
2- He will give the sale price of 20% off the original price but you wont be able to use a coupon.
Which deal do you take?
Trump would like you to believe #2 is the better deal.
.
>> “So what happens if/WHEN Cruz endorses Trump’s tax plan?” <<
.
Your future home freezes over?
Cruz is a flat taxer.
A family earning $100,000 would pay ZERO on the first $50,000 and only 10% on the next $50,000. That's $5,000 in taxes, not $20,000.
Here is the rate schedule. Try it again.
Your numbers aren’t right at all. Nominal median income is 7 times what it was in 1971. Inflation-adjusted it’s slightly higher.
http://www.davemanuel.com/median-household-income.php
It dips during recessions, and dipped a lot in the Bush/Obama recession.
Tuition at Harvard is a ridiculous standard to use. How about the cost of a computer? They’re much smaller and cheaper now than they were in 1971. And that affects way more people than Harvard does.
I’m well aware of H1B but this still accounts for a relatively small number of people. Absolutely there are lots of bad government policies hurting our economy and all of us, but it’s not right for people to break it down into a “rich are screwing the middle class” paradigm like OWS does. There’s never been a time in history when people weren’t looking for excuses demonize the rich out of envy.
use 1 million if it makes you feel any better.
The point is still the same.
The RATE doesn't matter, all that matters is if more or less comes out of your pocket in the end.
If millions would be paying nothing, that means that still paying will be paying more. The fact that he has lowered their rate is irrelevant, he will be taking away deductions they currently enjoy and in the end will end up paying more.
It's a scam.
And dont fall for Trumps “Hedge fund guy” rhetoric, that's just the newest way of saying “the rich should pay more” which democrats always say.
OH!
And also dont fall for Trumps BS about people earning less than $50,000 paying no taxes. That is meant to FOOL people. Because everyone imagines that no taxes means no taxes, when what it REALLY means is no INCOME taxes. Everyone will still pay Social Security and Medicare Taxes.
But again this is all purposely stated this way to fool the low information voter.
Not sure what you are trying to argue, you are agreeing with my point. Median income adjusted for inflation is almost exactly what it was in 1971, the difference is in 1971 nearly every household was a single family breadwinner and today the overwhelming majority are 2 income families, that means its taking 2 people to bring home on average what 1 person could do in 1971! That’s a huge huge!
The harvard tuition is used as an example, it was one of the most expensive schools in 1971, and it was about 10% of a median households income, today its nearly 100% of a median households income.
You are very very naive if you don’t see that 2 people required to work to make the same amount of real money as as 1 did 40 years ago is a problem that is not simply “get a better education”
So would you rather pay 5,000 or $16,169.
BTW, I am not a low information voter. I am a former tax CPA with one top firms in the world and a retired senior Wall St investment banker.
I think you are headed in the right direction with your analysis, but you have a long way to go to prove your point.
You can't pull figures off the top of your head and impress others with your analysis.
Crunch some numbers and get back to us.
I can’t predict the future, so my calculations were based on current IRS code.
I don’t know what Trump’s plan does, but I’m not likely to pay more since I’m not a hedge fund manager ;)
Trump's plan is still better, producing a tax liability of $220,000 compared to a $275,000 tax bill under the current plan.
are you listening?
The numbers are not important.
Use a _________ if you prefer, it makes no difference.
If someone makes _________ and owes $10,000 in taxes but get to deduct $5,000 for whatever reason, he only owes $5,000 in taxes.
If that someone makes __________ and owes $8000 in taxes and doesn't get to deduct anything, he owes $8000 in taxes.
Obviously the person in the first example is paying a higher taxes rate, but notice that the person in the 2nd example is paying more in taxes.
This is the game the liberals have been playing for DECADES when it comes to tax rates!
I visit liberal boards ALL the time, because I want to know what my enemy thinks. And this is the issue they are most WRONG about! They ALWAYS say “the rich are not paying any taxes!” or the “rich are not paying their fair share!” and then point to the fact that back during the FDR years the top marginal tax rate for like 90% as PROOF the rich are not paying their fair share.
NOTHING could be further from the truth!
The rich have consistently been paying a larger and larger share of income taxes over the last 70+ years!
Yes, the top marginal tax rate has gone WAY down, but each and every time it was lower the rich lost access to deductions which resulted each and every time with them paying MORE in taxes in the end.
Even Reagan pulled this stunt! Yes he lowered the top marginal tax rates, but he simultaneously eliminated deductions like credit card interest and the ability to depreciate property over a short period of time. The end result was that the rich ended up paying MORE in taxes than they had prior to the lowering of their tax rates.
Actually, no. You are a waste of time.
RE: Trump Plan Cuts Taxes for Millions
But increases them for Millionaires. That’s what the Democrats in Northeast always propose.
Trump’s plan has a top in come tax rate of 25% (20% on Long Term Cap Gains and Dividends) currently the top income tax rate is 39.6%. It lowers the top tax rate, not increase it.
Wake up and stop promoting the Democrats!
Taxes are more progressive today than in 1979, during the Carter administration. As of 2011, the top one percent paid almost 10 percentage points more of the federal share in taxation than they did in 1979. The top fifth of income earners paid more than 13 percentage points more than they did in 1979. This is in spite of the top marginal tax rate falling from 70 percent in 1979 to 39.6 percent.
There is a chart in this article which shows what I am trying to tell you.
When there was a 94% top rate in 1944-45, there were so many deductions and exclusions that the taxable income was not comparable to someone’s entire income. First, the top rate started at $200,000, which today is equal to $2,413,059.90 — so the maximum EMTR would apply only to incomes of $2.5 million. But, that’s still taxable income, not earned income.
In 1944, you could deduct business meals, all business travel, all forms of interest payments, and much more. You could even deduct spousal travel expenses on a business trip! (Why travel alone?) Companies could also “loan” or “provide” almost anything to an employee, from an apartment to standard benefits. It was possible to shelter tens of thousands of dollars from taxable income. Three-martini lunches and expense accounts were important realities, skewing tax calculations.
As a result of deductions and exclusions, even the theoretical maximum Real Rate of taxation at 60% in 1944 overstates taxation dramatically. The reality? On earned income, the richest U.S. taxpayers paid close to 40 percent of their earned incomes in taxes in 1944. We simply didn’t count much of the compensation as taxable income.
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