Tuesday, November 7, 2017

A Tax Bill For The Lazy Rich

Donald Trump tells his base that his tax plan was designed to benefit them.  He understands, of course, that they understand few of the details in his tax plan.  However, he can't resist adding a little bit of spice to his fable.  He tells his true believers that his tax plan will not benefit rich people like himself.  Apparently, Trump is sacrificing himself in order to take better care of ordinary Americans. That, of course, is a winning strategy but it just another one of his big lies.  For example, eliminating the estate tax will not improve their lives, but it will be good for the heirs of households with estates worth more than $11 million.  There is no estate tax for household below that threshold.  Donald Trump's estate will be many times above $11 million.  Most of Trump's businesses are pass through businesses.  The profits of those businesses are taxed at 39% for individuals in Trump's tax bracket.  Under the new law the profits will be taxed at 25%.  There are some exceptions to that in his tax bill but it favors individuals who have a less active role in the business.  Trump, of course, cannot have an active role in each of his numerous business entities which will benefit from the new law.

Trump also wins big time from the elimination of the alternative minimum tax (AMT).  This was not discussed in this article but he has been forced to pay tens of millions in taxes because of the AMT.  Of course, he is not the only person who will benefit from the elimination of the AMT.  It was put in place to insure that high income households could not eliminate taxes by taking large deductions from their gross income.  Trump had to pay millions in the only tax return that has become public because of the AMT.

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