Friday, April 28, 2017

Musings on President Trump’s tax plan

Here’s a “Fight for 15” I can get behind.

Trump’s plan to bring the peak of the federal corporate income tax down from 35% to 15% would be, as he likes to say, huge. That would take the US from the second highest rate in the world down to one of the lowest.

Doing so would allow businesses to reinvest in themselves and other productive sectors of the economy. Money would be spent on paying off debt, the purchases of new machinery and products, training, wages and more. That lower rate would also encourage vagabond companies to reshore, after having previously escaped for lower taxes elsewhere.

Many naysayers like to tell everyone that the “evil corporations” will benefit most of all. Will they? Most of the large corporations already left our country /or play the system to pay a taxable amount far below the 35%, if even anything at all.

The companies paying the 35% or something near that are the small employers and the medium ones, like my company, local farms, your doctor’s office, your favorite restaurant, and probably your employer. It’s the giant players like Apple, GM, United and GE using foreign tax havens and subsidiaries and domestic loopholes that have been putting an undue burden on the family-owned and operated businesses and the working class for as long as there has been a tax code.  

Now, we little guys will get the chance to flourish…and so will our coworkers. 


A major flaw with Trump’s tax plan is the elimination of the deduction for state income and local property taxes.

More than 3.2 million taxpayers in the Empire State claim that deduction annually, as we should: Combined, those two factors account for 12.7% of the average New Yorker’s annual income. That’s the highest rate in the entire country; we pay a third more in property, school and state income taxes than the average American.

If Trump’s plan were to pass, we’d be taxed on what we already paid out in taxes. That’s not right. If you’re going to be taxed, be taxed on the income you actually have accesses to and not that you already gave to some form of government.

Many members of congress said that part of the plan is a non-starter. Let’s hope so.   


Don’t be surprised if large banks and Wall Street financial institutions rail against the 15% corporate tax rate.


Businesses will be flush with cash, which means they can pay off their debts (and not continue to pay interest) and if they accumulate enough money they will have less of a need for lending institutions when they want to expand.

Do you think JPMorgan & Chase would really allow that to happen?


Another huge benefit of the tax plan is the elimination of the estate tax.

If you listen to the talking points from the death tax’s proponents, it’s the filthy rich who will benefit from this.

It’s not. Small businesses will.

Most business owners might not be sitting on a lot of cash in their personal bank accounts, but they can be sitting on a lot of what the government considers to be loads of taxable wealth that they accumulated over the years in the form of their company. In the case of mine, it would be the buildings and molding machines. In the case of local farmers, it would be their land, barns, and tractors. We’re talking big money there, not as greenbacks, but as property, plant and equipment.

The estate tax will actually kill an unsuspecting business when one of the principles passes away. And, for the others who plan for the inevitable like we have, they could be wasting tens if not hundreds of thousands of dollars annually preparing for the future tax tsunami.

Eliminating this hideous tax would allow family-owned businesses (the American Dream incarnate) to weather the most difficult of times. No one wants to lose a parent, wife or husband. No one wants to lose a business because of that.

From the 01 May 2017 Greater Niagara Newspapers 

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