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What Could Possibly Go Wrong With Tax Reform? The Answer, According To Goldman, Is "Plenty"

What Could Possibly Go Wrong With Tax Reform? The Answer, According To Goldman, Is "Plenty"

One of the reason why the torrid dollar rally of the past few weeks appears to have plateaued, at least for the time being, is that just like earlier in the year, doubts have emerged about the viability of the "new and improved" tax plan, which according to the Tax Policy Center would mostly benefit the "Top 1", even as it eventually pushes taxes for the upper middle class progressively higher.

Goldman: Trump Tax Cut "Smaller Tax Expected"; Here's What Can Kill It

Goldman: Trump Tax Cut "Smaller Tax Expected"; Here's What Can Kill It

Just hours before the Trump tax plan was leaked this morning, Goldman noted that "even if this tentative budget agreement in the Senate becomes official the forthcoming proposal would have to be scaled substantially to fit within the fiscal constraints Congress is likely to impose" which we summarized as follows:

In other words, for all the hype, the final Trump tax cut - if it passes - will be a pale shadow of its initial proposal

Goldman also presented the following comparison table to summarize how the expected plan would fare in context:

All You Need To Know About Trump Tax Reform: Goldman Explains

All You Need To Know About Trump Tax Reform: Goldman Explains

This afternoon, during a speech in Indianapolis, President Trump will unveil the long-anticipated Republican tax reform proposal that calls for substantial business and individual tax cuts. As has been leaked previously, the tax plan is anticipated to disclose a 35% individual tax rate (although Congress may push it higher), a tax rate on corporations and pass thrus that will be around 20% and 25% respectively, while doubling the standard deduction to $12,000 for individuals.

Trump Tax Plan Leaked, Includes Tax Cuts For Wealthiest Americans; Morgan Stanley Skeptical

Ahead of the Trump administration's official disclosure of what its latest tax proposal would look like, overnight Axios leaked some of the more salient highlights, the first being that the tax rate for the wealthiest Americans would be cut to 35% and second, taxes on on big and small businesses would be reduced substantially, with plans to cut the top tax rate for “pass through" businesses from 39.6% to 25% - a move which would impact LLCs and sole-proprietorships.

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