Remember Voodoo economics, a phrase coined by George Hebert Walker Bush back in the “80’s”? If you do you’ll likely thinks as we do here, that our make-believe POTUS has come up with a new version of voodoo economics. Of course specifics are very sparse and policy wonks will ne having a ball. But in the meantime all the armchair economists can have some fun with what appears to be the plan to ultimately break America for good. While the assumptions and the projected benefits resulting from said assumptions sound great the devil is in the details,and those are something is in very short supply.
Brief summary from The Washington Post.
Many budget experts say they believe the White House’s plan would reduce federal revenue by so much that it would grow the debt by trillions of dollars in the next decade, growing interest costs and slowing the economy.
The central feature of the White House’s plan would be a big reduction in tax rates for virtually all Americans and businesses.
It would eliminate the seven existing income tax brackets and replace them with three brackets, containing new rates of 10 percent, 25 percent and 35 percent, based on someone’s income.
It would also roughly double the standard deduction that Americans can use to reduce their taxable income. The deduction for married couples would move from $12,600 to $24,000.
The White House plan would eliminate the alternative-minimum tax and the estate tax, provisions that raise billions of dollars each year but have long been the target of Republicans seeking to rip up the tax code.
To offset some of the cost of the lower rates, Trump administration officials said they were proposing to eliminate virtually all tax deductions that Americans claim, provisions that they argued primarily benefited wealthier Americans.
This includes the tax deduction people can claim for the state and local taxes they pay each calendar year. These taxes can be particularly high in states with higher income taxes, such as California and New York.
For businesses, Trump’s proposal would lower the corporate tax rate from 35 percent to 15 percent, and it would also allow smaller businesses, structured in such a way that they are affected by the individual tax rate, to also use the 15 percent threshold.
But they can also include large law firms and lobbying shops.
“We expect that trillions of dollars will come back on shore and will be reinvested here in the United States, for capital goods and job creation,” Mnuchin said.
The trouble Trump has is that while his administration says the tax cuts will over time pay for themselves, Congress’s nonpartisan budgetary referees at the Joint Committee on Taxation won’t work off that same assumption.
Full article CONTINUES HERE.