The tax plan President: prospects, predictions, expectations

The tax plan President: prospects, predictions, expectations

So, we offer the White house tax reform in the United States is becoming more and more clear outlines. The white house and Republicans of Congress have agreed on the structure of future reform, while not focusing on the details. Approved «a frame» will serve as a benchmark for congressional committees, developing tax legislation.

Among the main provisions of the future reform should include lowering the tax rate on corporate profits in the U.S. up to 20% (from the current level of 35%). That, according to the White house, should improve after reducing this tax? The Outlook is very promising. Low corporate taxes, economists say, should stimulate companies to invest in new equipment and software, for exploitation of which will require more qualified personnel. Then the company, on a plan the White house will have to raise wages for skilled labor (the average expected wage growth at 5% per year). Today the country has one of the lowest wage growth since the great Depression – about 2% per year. This despite the fact that the amount received by the enterprises profits rose.

In addition, one of the main purposes of the new tax plan is to return profits of us companies from abroad. On average, the total amount of income that must be returned to the US, according to estimates by the White house, is $ 2 trillion.

At the same time, according to the analysis of the tax policy Center, an independent research organization, the end result of the proposed changes depends first of all from people with higher incomes.

Kevin Hassett, Chairman of CEA, said that to achieve efficiency in the implementation of the reform will require 5 years. He also announced the specific result sought to be achieved the White house is the increase in average American family income at $ 4,000 per year. As the President said trump, tax reform could become a «Christmas gift» for middle-class Americans.

The Democrats have already managed to criticize the new tax plan, calling it unfair, unprecedented, cost-saving features of rich people. In fact, the new tax plan entails reducing taxes in the amount of 1.5 trillion dollars and the Democrats claim that this amount will be added to the national debt of the United States as a result of the reform.

Speaking on Saturday with the weekly political statement, Senator Bernie Sanders, former presidential candidate, said that the budget and tax proposals trump are «the most destructive and unfair» in modern U.S. history.

«Donald trump and the Republicans in Congress claim that their tax plan will benefit the middle class. Nothing could be further from the truth» — quoted by Sanders Reuters.

This month, the Republican tax bill is facing a critical barrier: the Senate shall approve a budget for 2018. Congress can not promote the tax plan as long as the budget does not pass both legislative chambers. The only other option is to get a bipartisan tax bill, but the Democrats don’t seem willing to compromise.

It should be noted that in addition to the Democrats disagree with the effectiveness of the proposed administration of the President’s tax plan and some reputable analytical organization. So, Goldman Sachs, made a review of recent economic studies on this issue have come to the conclusion that the forecasts of the White house on the outcome of the proposed tax reform, greatly exaggerated.

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