Many voters failed to notice the switcharoo pulled by Team Trump late into the election.
Through most of the campaign season, buzz continued over Donald Trump’s proposed reduction in business tax, from 35% to 15%. However most voters were drawn in by the increase in standard deductions and the three simple tax brackets of 10%, 20% and 25%.
The plan represented a nice break for the American tax payer that would return the income tax to a level not seen since 1931.
As the campaign progressed, Trump gave into criticism over the cuts and increased the brackets by as much as 40%. The new, NEW brackets are 12%, 25% and 33%.
Compared to current rates, the lowest earners with a taxable income of $18,550 and below (for married couples filing jointly) will see a . . . get this . . . a TWENTY PERCENT INCREASE in taxes.
Conservatives are not up in arms over this as many lower income producers also receive significant welfare subsidies.
From there, the tax cuts look promising for most earners, with the exception of families with more than one child.
While the Trump plan doubles the standard deduction (Trump proposes a $30,000 deduction for married couples), the personal exemption is gone. So that $4,000 exemption per child is now gone.
For high earners, personal exemptions were phased out anyway by Obama for couples who earned more than $305,050.
The biggest beneficiaries of the Trump Tax plan are still the high earners who see a reduction whopping 10.4% tax break. Not only will their tax rate drop from 39.6%, they’ll also no longer be required to pay the dreaded Obamacare Tax of 3.8%.
Big win for top earners who pull in over $225,000 per year.
For the rest of us, the break is still . . . well, a break, but only representing around $2,200 a year for most Americans.
While many workers are fed up with paying 30%+ of their paycheck to state, federal and local tax agencies, historically, the tax rate in the United States is comparatively low in its history.
For most of the 20th century, the tax rate topped out at 70% . . . reaching as much as an astounding 92%.
Compared to current top tax rates, we’ve got it easy.