During the 2016 presidential campaign, the then-presidential candidate Donald Trump promised to get the economy moving at a 3 percent (or higher) growth rate. Republican leadership has largely been cooperating, and have been pushing out tax reform measures in the capital to get our economy back on track.
Secretary of the Treasury Steve Mnuchin described the proposal earlier this week as the “biggest tax cut and the largest tax reform in the history of our country.”
According to The Daily Caller, Trump’s plan would, “slash the income tax rate for public corporations from 35 to 15 percent and reduce the top tax rate paid by pass-through businesses from 39.5 percent to 15 percent. The cuts will apply to small businesses and large conglomerates alike.”
National Economic Economic Council Director Gary Cohn commented that we’re “in 2017, we are still stuck with a 1988 corporate tax.”
Because of the ridiculously high tax rate, businesses have been avoiding the U.S., and they’ve been awaiting an announcement like this for some time. If Trump hadn’t delivered, there would have been stern repercussions.
“Investors have put a lot of stock behind today’s announcement, and if Trump fails to provide the specifics of his plan or explain how he intends to pay for it, then a pullback below 20,850 points for the Dow Jones and 2,375 points on the S&P 500 wouldn’t surprise us,” Head of Research at ADS Securities Konstantinos Anthis stated.
On the promise that these tax cuts would be put in place, American companies have started to bring business back to the States.
Trump also called for an increase in the amounts of deductions that can be claimed for individuals, which will alleviate the stress felt by thousands of Americans.
“We are going to double the standard deduction, so that a married couple won’t pay any taxes on the first $24,000 of income they earn. So, in essence, we are creating a zero tax rate for the first $24,000 a couple earns,” Cohn announced.
Trump, according to The Daily Caller, “originally promised in August, 2016, to raise the standard deduction rate to $25,000 for single filers and $50,000 for joint filers. The president later revised his plan after Democrats lambasted it to include “a standard deduction of $30,000 for married households and three brackets of 12%, 25%, and 33%,” Scott Greenberg, analyst with the Center for Federal Tax Policy at the Tax Foundation.”
“The Trump administration is also focused on pushing job creation and economic growth. To advance these agendas, Cohn said the plan will return the top capital gains tax rate and dividends rate to 20 percent, “repealing the harmful 3.8 percent Obamacare tax on dividends and capital gains.””
In fact, according to new reports, the U.S. economy grew at a rate of 3 percent in the third quarter of 2017, a continuation of a growth trend that we’ve been witnessing after a 3.1 percent growth rate in the second quarter of 2017.
This is what we’ve all been waiting for.
H/T: The Daily Caller