President Donald Trump and the Republican party finally introduced their long-awaited Tax-plan. It is the biggest Tax overhaul in decades and many different opinions have been stated about the plan. “This is a revolutionary change, and the biggest winners will be the everyday American workers as jobs start pouring into our country, as companies start competing for American labor and as wages start going up at levels that you haven’t seen in many years” President Trump stated. There is no doubt that these tax changes are tremendous and will change everything we know about taxes but will it have a positive or negative impact on America and most importantly the people of New York.
For each American Citizen, the plan would collapse the tax brackets from seven to three, with tax rates of 12 percent, 25 percent, and 35 percent, according to President Trump himself. The new plan would also give Congress the option of creating a higher, fourth, rate above 35 percent in the tax plan to ensure that the wealthy are paying their fair share. The GOP new tax plan also simplifies our Tax system and cut taxes for the middle class by doubling the standard deduction to $12,000 for individuals and to $24,000 for married couples filing jointly. This would allow people to a complicated process of documenting their taxes to claim various credits and deductions. It would increase the child tax credit from $1,000 to an unspecified amount, and create a new $500 tax credit for non-child dependents, such as the elderly etc. alternative minimum tax and the estate tax would be eliminated. The corporate tax rate would be 20 percent from 35 percent which many believe would give American Businesses the boost needed to compete with companies throughout the world. Pass-through businesses (i.e. partnerships and sole proprietorships) would get a new flat tax rate of 25 percent.
Even though President Trump plan does a lot for businesses and non-profits in New York, his tax plan if pass can have a detrimental impact on every New York resident. President Trump proposes to eliminate SALT (state and local tax) deduction. This is very disadvantageous for New Yorkers due to the high state tax rate, essentially it is a double tax just because you live in the state of New York. Gov. Cuomo, a regular critic of proposals to eliminate the SALT deduction, said on Wednesday the state would challenge the elimination of the deduction as unconstitutional double taxation. He equated the Trump tax plan to trickle-down economics, and Sen. Kirsten Gillibrand, D-NY, called the plan “a cruel joke to working people across New York.’’
President Trump and GOP campaigned vigorously promising to overhaul our tax system. But will it benefit every New Yorker. We Will have to wait and see.