President Donald Trump unveiled pieces of his tax plan Wednesday — a move long-awaited by both sides of the aisle in Congress and the American public.
According to a one-page outline from the Trump administration, the tax reform will attempt to grow the economy, create jobs, simplify the country’s “burdensome” tax code and dramatically lower the business tax rate to one of the lowest in the world.
The business tax rate, which is currently 35 percent, will be slashed to 15 percent across the board, affecting large corporations and small mom-and-pop shops alike.
Other efforts to help small businesses include repealing the estate tax — better known as the “death tax” — which is applied to the property of a person who has died and is commonly used when a business is posthumously passed down from parents to children.
Trump is also seeking to repeal the alternative-minimum tax, known as the AMT. The AMT, which is calculated when an individual does their taxes, is applied to people who earn over a certain income and have a considerable number of deductions.
Also on the chopping block is the 3.8 percent Affordable Care Act tax on capital gains — which is income from investments and has been subject to surtax as part of the ACA since 2013.
Another key component of the plan will be condensing the number of tax brackets from seven to three: 35 percent, 25 percent and 10 percent. The White House has yet to reveal the income ranges for each bracket.
In addition to lowering tax rates, Trump seeks to further assist American families by doubling the standard deduction for married couples. This will keep married couples from paying any income tax on the first $24 thousand they earn.
The new plan received mixed reviews from University of Maryland students.
Sophomore government and politics major Michael Brennan, director of outreach for UMD’s chapter of Our Revolution, cited Trump’s 2005 tax returns as a reason to believe why some pieces of this tax plan are included. In 2005, Trump paid $31 million alone due to the AMT.
Brennan said the plan to eliminate the AMT is “the most blatant plutocratic policy you can really install as Donald Trump or any billionaire president of the United States.”
Brennan’s group is calling on the president to release his most recent tax returns.
Sophomore government and politics major Steven Clark, the president of UMD’s College Republicans, noted tax overhaul to this scale has not been seen since former President Ronald Reagan’s administration implemented major tax reforms in 1986.
He believes cutting business and personal taxes is crucial to rapidly growing the American economy.
Clark believes Trump is on the right track with his proposal.
“President Trump is off to a good start on tax reform,” he said. “We urge the president and Congress to continue working to find a solution that will cut tax rates, close loopholes [and] simplify the process, while also not adding billions to the deficit.”
Featured image from Wikimedia Commons.