In shocking SurveyMonkey polls conducted from (February 12 to March 5th, 2018), a majority of people in these key states support Trump's Tax Plan: Florida, Wisconsin, Michigan, & Ohio. Further, 50% or more of voters in 10 states that voted for President Trump but have Democratic senators have a positive view of the economy.
The Trump Tax Plan has key provisions that puts money in workers bank accounts and onto main street.
Here are the 10 biggest reasons why working families are feeling the joy.
- Each paycheck is bigger. Lowering of tax rates for working families. If you look at the new middle-class brackets, it seems that there is an average reduction of 2-4 % in federal taxes which is a huge amount of money for families living paycheck to paycheck. There are now seven (7) tax rates. They are: 10%, 12%, 22%, 24%, 32%, 35% and 37% (there is also a zero rate). Rich Will Pay the Higher Capital Gains – There is a higher combined 23.8% Capital Gains Tax on the rich.
- Local companies have more money. Companies can pay employees more or give more retirement matching dollars. Corporate taxes are reduced from: 35% to 21%, starting in 2018. This will create a big incentive for international companies to relocate to the USA to reap the benefits of lower taxes, pay employees more, and pay out better dividends to retirees and investors. Dividends help put money on main street and dividends are taxed at a low rate for retirees. By drastically cutting the corporate tax rate from 35% to 21%, the Trump administration said it would incentivize companies to stay or move into the United States. As Majority Whip Steve Scalise said, “Let’s make America competitive again.”
- Small business owners win big with health care and income taxes. If you have self-employment income that you used to pay for Obamacare, you may deduct your out-of-pocket premiums. Also, LLC or Sole Proprietorships may now be able to: deduct 20% of their QBI qualifying income before calculating their tax bill. Roughly a 5% tax reduction for small business owners, independent consultants, researchers, writers, educators, coaches trainers etc. who earn income from various sources.
- Doubled the child tax credit. The recently passed GOP tax reform bill doubles the amount of the Child Tax Credit from $1,000 to $2,000 per qualifying child. Ivanka Trump gets credit for pushing this into law.
- Medical expense deductions increased for 2 years. Was 10% of AGI and now has lower and better 7.5% threshold which helps with bills for catastrophic care helping with hospital issues as: bypass surgery, cancer treatments, hip replacement, pneumonia, or even long term care.
- Expanded hardship provisions for 401k’s. Taxpayers can borrow up to $50,000, or half the balance in your account, whichever is less and you repay the money, plus interest, to your own account under more flexible rules. Not only that, but you have more time (October of the following year with extension) to pay the rollover money back to the 401k or plan.
- No capital gains tax on the working poor. A 0% Capital Gains Rate for those in the most need with lowest Incomes with an increase of annual tax free gift amounts moving up to $15,000 dollars per year to each person or $30,000 dollars per year from parents.
- Child and dependent care credit - If you paid someone to care for your child, spouse, or dependent last year, you may be able to claim the Credit. This can be from $3,000 per child up to $6,000 dollars if you are eligible under AGI provisions protecting working families and the middle class.
- Business bonus depreciation: The act extended and modified bonus depreciation under Sec. 168(k), allowing businesses to immediately deduct 100% of the cost of eligible property in the year it is placed in service, through 2022.
- Buying equipment for the small business gets a tax break. Examples are a large truck or other needed asset. Sec. 179 expensing: The act increases the max amount a taxpayer may expense under Sec. 179 to $1 million and increased the phaseout threshold to $2.5 million. They will be indexed for inflation after 2018.
Two key economic points of why national tax efficiency is vital.
- For every person who gets a job, a greater number of people would be removed from the public assistance rolls which reduces federal and state deficits and debt along with state revenue burdens.
- If the new USA tax policy is now better than any of the other 180+ countries in the world, then new companies, investors, and higher skilled immigrants will very possibly “move to” or remain here in the USA where there is a competitive tax system and minimal sovereign risk.
Overall, President Trump is polling an average of 50% approval this week. Trump is polling about 6.4% higher than Trump’s Real Clear Politics Polls Average of 43.6% on election day 2016 where President Donald Trump won 30 States.
George Mentz JD MBA CWM Chartered Wealth Manager ® is a licensed attorney and CEO of GAFM ® global education, which is an ISO 29990 Certified professional development company operating in over 50 nations.
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