vostok
Well-Known Member
I'm doing the right thing, and it's not good for me, believe me." - Donald Trump on his tax plan in Indianapolis on Wednesday.
Unpacking Donald Trump's latest tax proposal is a bit of a challenge, but it's fairly safe to say that it would, in fact, be quite good for him.
In quite a few places, the plan - estimated to cost at least $3tn (£2.23tn) over 10 years - is short on details.
There's no information, for instance, on what income levels would fall into newly adjusted tax brackets.
As for Mr Trump's personal finances, that picture is even muddier, given that he is the first president in more than 40 years not to publicly release his tax returns when running for office. During a White House briefing about the president's tax plan on Thursday, economic advisor Gary Cohn repeatedly declined to discuss how the administration's plan might alter the president's tax obligations.
Given what we do know about his situation - including from the leak of his 2005 tax returns in March - certain conclusions can be drawn about how his proposed changes could affect Mr Trump and his family personally.
While some Americans could see their taxes go up if the president's proposal becomes a reality,
Mr Trump has a very good chance of ending up on the winning side of the ledger.
Here are three ways he's likely to benefit (and one way he could be hurt).
The Alternative Minimum Tax
The Alternative Minimum Tax (AMT) will be abolished entirely if Mr Trump has his way. The levy was first instituted in 1982 as a means of ensuring that the wealthiest taxpayers can't entirely avoid paying income taxes by taking significant deductions for expenses like state taxes, interest on home mortgages, charitable donations and medical bills.
The AMT is a separate way of calculating tax obligation that, if it results in higher amount owed, replaces the standard tax system with a starting rate of 26% (subject to a personal exemption) that increases to 28% on income over $179,500.
In his 2005 tax returns, the AMT hit Mr Trump hard. With it, he paid an additional $31m in taxes, setting his tax rate at roughly 24%. Under the standard tax computations, Mr Trump's effective rate would have been 4%.
The Estate Tax
The estate tax is also facing the axe in Mr Trump's proposal. The "death tax", as it's called by its detractors, currently exacts a 40% levy on inherited assets in excess of $5.49m (twice that for married couples). It affects only a small number of American estates every year - 5,500 out of roughly 3 million in 2017.
Donald Trump has given control, but not ownership, of his business empire to his children while he's president
Given the lack of concrete information on the disposition of Mr Trump's far-flung business empire, it's difficult to calculate exactly how much his heirs would receive at the time of his death - and how much would be subject to the tax.
It's safe to assume, however, that the president's assets are in excess of the amount exempted. He has said in the past that his net worth is $10bn, which would create a $4bn tax burden in the unlikely event that none of those assets are sheltered.
(http://www.bbc.com/news/world-us-canada-41423159)
