Potential Impact of the Trump Tax Proposals | Carson Wealth

Potential Impact of the Trump Tax Proposals

Share Post: facebook Created with Sketch. twitter Created with Sketch. linkedin Created with Sketch. mail Created with Sketch. print Created with Sketch.

Published by Mark Petersen and the Carson Group Partners Investment Committee

Every new administration in Washington D.C. has an agenda which results from the November election results. Candidates have talking points on the campaign trail. The winner believes that he or she has a ‘mandate’ from the people to implore Congress to enact their legislative will. We saw with the recent attempt to repeal and replace the Affordable Care Act (ACA) that this may not be the case. For the time being, Healthcare Reform has taken a back seat to Tax Reform, an item seemingly easier to accomplish.  After all, who does not wish to pay less income tax? However, we have seen in recent years that when Republicans and Democrats must agree, the results are far from certain. With that in mind, we thought it might make sense to see who may be impacted by the various Trump tax proposals and who may have a vested interest in the outcome of the legislative process.

Proposal

Reduce the tax brackets from the current seven to three

Married Joint filers:

  • Less than $75,000: 12%
  • More than $75,000 but less than $225,000: 25%
  • More than $225,000: 33% 

Retain the existing capital gains rate structure

Carried interest taxed as ordinary income

8% ACA tax on investment income will be repealed

Increase standard deduction for joint filers to $30,000 from $12,600

Eliminate personal exemptions

Itemized deductions capped at $200,000

Repeal death tax

Capital gains held until death and valued over $10 million will be subject to tax to exempt small businesses and family farms

Contributions of appreciated assets into a private charity established by the decedent or the decedent’s relatives will be disallowed

Potential Impact

Reduces highest ordinary income tax rate by 6.6%

Largest benefit for high-income individuals

Increase tax rates for certain financial business and their owners

3.8% tax reduction for highest income individuals

Limited application to high income individuals

Largest benefit for those who do not itemize deductions or barely exceed the standard deduction amount

Most impactful to large families, exemptions already phased out for high income earners

Limited impact to very high income, already subject to phase out of itemized deductions at high income levels

Most impact on C-corporations

S-corps and LLC’s pay tax on current earnings

Potential large reduction in charitable giving by eliminating the tax deductibility of charitable contributions

 

Proposal

Repeal and replace the Affordable Care Act (ACA) with Health Savings Accounts

Modify existing law that inhibits the sale of health insurance across state lines

Allow individuals to fully deduct health insurance premium payments

Tax-free contributions to Health Savings Accounts

Lower healthcare costs for all Americans

Reduce number of individuals needing access to programs like Medicaid and CHIP by installing programs that grow the economy and bring capital and jobs back to America

Renegotiate trade deals

Repeal Dodd-Frank

Attack fraud, waste and abuse in government

Immigration reform

Potential Impact

Potential bookkeeping relief and penalty risk reduction for large employers (over 100 employees)

Potential for increased competition which may reduce insurance rates

Greater benefit for large group plans

Benefit across the board

‘Cadillac’ health plans fully tax deductible

No change from current law unless the annual contribution cap is removed

Has the potential to lessen the need for tax revenue

Potential for trade wars which are not good for any country and potentially increase import prices

Less government regulation, particularly for financial industry businesses

Potential to lessen the need for tax revenue

Wage pressure for the jobs currently held by immigrants and across the board wage pressure in a ‘full-employment’ economy


 

 

Share:
facebook Created with Sketch. twitter Created with Sketch. linkedin Created with Sketch. mail Created with Sketch. print Created with Sketch.
Share Post: facebook Created with Sketch. twitter Created with Sketch. linkedin Created with Sketch. mail Created with Sketch. print Created with Sketch.

RECENT POSTS

My Favorite Financial Planning Tool

Published by Ron Carson The digital world is filled with financial planning tools and apps that can help you take stock of specific aspects of your financial situation, whether that is how much you are spending on lattes or whether you are saving enough for retirement.

Financial Planning is for Everyone

Published by Beth Schanou Everyone can benefit from some form of financial planning. Not all plans look the same because we are individuals and have unique needs, but the need for some amount of planning is present for every age group and financial status. Often this can be difficult to emb …

3 Ways to Manage Emotional Investing

Published by Jessica Golson This deep into one of the longest bull markets in recorded history, some investors are beginning to ask how much longer this will last and what should they do. Well, I’m not going to answer that question or make market predictions, but I will go over an essential …

Medicare 101: What You Need to Know

An often overlooked aspect of financial planning is considering health insurance options. Health care costs continue to rise, and as you grow older the likelihood you’ll need those services increases.
1 2 3 59 60 61 62 63 106 107 108
Potential Impact of the Trump Tax Proposals | Carson Wealth

Get in Touch

In just 15 minutes we can get to know your situation, then connect you with an advisor committed to helping you pursue true wealth.

Schedule a Consultation