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Tags: experts | trump | tax cut | plans | expensive

Experts: Trump's Plan for Tax Cuts Too Expensive

Experts: Trump's Plan for Tax Cuts Too Expensive

(AP Images)

By    |   Tuesday, 15 November 2016 02:49 PM EST

President-elect Donald Trump's plan for tax cuts is too expensive and could cost between $6 trillion and $7 trillion, according to experts, CNN Money reports.

House Republicans have presented their own plan that estimates put at half as expensive. The plans are alike in a few ways: a larger standard deduction, only three tax brackets, and lower income tax rates for individuals and businesses.

Horizon Investments chief global strategist Greg Valliere said although both sides want tax reform, they are in disagreement about how to make it happen.

"Just because everyone buys into the premise of tax reform doesn't mean they all agree on the details," Valliere said, according to CNN Money.

Tax Foundation federal projects director Kyle Pomerleau agreed, saying  "They agree on the easy stuff, like having lower rates. But not the hard stuff."

The House's plan costs less because it eliminates all deductions except two: mortgage interest and charitable contributions, CNN Money reports.

Tax rates for small businesses and partnerships are likely to be up for discussion, CNN reported. The president-elect wants to cut the business tax rate from 35 percent to 15 percent. The House plan's cut is not as deep: the business tax rate would be 25 percent.

The House GOP plan calls for a 12 percent rate for the lowest bracket, 25 percent for the middle, and 33 percent for the highest. The 12-percent figure is a tax increase from the current bottom rate, 10 percent.

Trump's plan may require lower- and middle-income parents to pay more because it deletes personal exemptions and head of household status. The House plan keeps the head of household status.

CNN Money notes both plans call for larger tax breaks for child care. Other areas where the plans are in sync include removing Affordable Care Act taxes (they aim to repeal the act) and removing the estate tax.

Ending the estate tax benefits the wealthiest Americans, as 0.2 percent of Americans are affected by it. Tax Policy Center director Len Burman said,

"The estate tax is history," said Len Burman, director at the Tax Policy Center. 

According to Bloomberg, financial advisors for the wealthiest Americans are telling them to cash in now to get the most benefit.

"You're really only talking to a small percentage of people who can really react to things like this," Baird financial planning director Tim Steffen said, Bloomberg reports.

Middle-income taxpayers and retirees should also take action now that could save them money if tax cuts happen, Steffen added.

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Politics
President-elect Donald Trump's plan for tax cuts is too expensive and could cost between $6 trillion and $7 trillion, according to experts, CNN Money reports.
experts, trump, tax cut, plans, expensive
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2016-49-15
Tuesday, 15 November 2016 02:49 PM
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