{"id":6276,"date":"2017-05-10T16:00:49","date_gmt":"2017-05-10T20:00:49","guid":{"rendered":"https:\/\/www.zacksim.com\/?p=6276"},"modified":"2022-02-26T13:19:30","modified_gmt":"2022-02-26T13:19:30","slug":"will-trumps-tax-proposals-affect","status":"publish","type":"post","link":"https:\/\/zacksim.com\/blog\/will-trumps-tax-proposals-affect\/","title":{"rendered":"How Will Trump&#8217;s Tax Proposals Affect You?"},"content":{"rendered":"<p><em>Libby from Green Bay, WI asks: News about President Trump\u2019s tax proposals is all over the place, but I still haven\u2019t been able to make any sense of it. I\u2019m a small business owner. Can you provide a summary of what the proposal says?<\/em><\/p>\n<p><strong>Mitch\u2019s Reply: <\/strong>Sure thing, Libby, thanks for writing. Please understand that at Zacks Investment Management, we are not tax advisors \u2013 but, the nature and structure of tax policy plays a part in how we make investment decisions. That being said, I can provide you with a summary of what was proposed in the administration\u2019s one-page release. There was not much substance revealed yet, but the general direction of the proposal is fairly clear. They want tax cuts across the board. Of course, nothing is set in stone as I write, and you can think of the tax proposal as more of a \u201cwish list\u201d than a legislative proposal. We are still a long way off from that.<\/p>\n<p>Between now and when an actual bill hits the president\u2019s desk, there are likely to be lengthy and vocal debates in Congress, with a healthy dose of finger-pointing and mudslinging of course. In my opinion, it would be a miracle if a bill was signed into law by October of this year. I think it will take longer.<\/p>\n<p>In other words, and in summary, whatever tax changes are actually passed will probably not take effect until the 2018 tax year, meaning you won\u2019t see the difference until you file in April 2019. Again, a long way off.<\/p>\n<p>For the sake of being thorough and answering your question, though, I\u2019ll break down at least what\u2019s on the table today for tax reform. Again, this is almost certain to change by the time it becomes legislation, but this is at least what the administration has in mind:<\/p>\n<ul>\n<li>You mentioned you were a small business owner\u2026if you are an LLC or S-Corp, for instance, this tax plan would greatly benefit you. It would lower your federal rate to 15%.<\/li>\n<li>The tax proposal also streamlines tax brackets and narrows them to just three: 10%, 25%, and 35%, though we do not know what income levels would apply to each.<\/li>\n<li>Repeal the 3.8% Obamacare surtax on business income which may affect small businesses like yours.<\/li>\n<li>Double the standard deduction.<\/li>\n<li>Maintain the home ownership and charitable gift tax deductions.<\/li>\n<li>Repeal the estate tax.<\/li>\n<li>Provide new tax relief for families with child or dependent care expenses.<\/li>\n<\/ul>\n<p>All the surface, these proposals may seem sensible and straightforward. But one of the major, overarching issues for progressives will be resistance to tax cuts for large corporations and the wealthiest Americans, and within the Republican party the biggest issue will be how these cuts will add to the deficit (which they will). Without corresponding spending cuts to make the tax plan \u2018revenue neutral,\u2019 deficit hawks in the Republican party will have major issues with it.<\/p>\n<p>So that lays the groundwork for the battle that lies ahead, which again is likely to span several months. Grab your popcorn and get comfortable, because this will take a while!<\/p>\n<p>And in the meantime, remember that it is important to choose stocks which don\u2019t just merely swim with the bullish tide, but have real solid fundamentals to back long-term growth. To help you understand which sectors and asset categories are most likely to fit these criteria and which are lagging, check out our latest Stock Market Outlook report. To get your free copy, click on the link below:<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Libby from Green Bay, WI asks: News about President Trump\u2019s tax proposals is all over the place, but I still [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":7436,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[66,71],"tags":[],"class_list":["post-6276","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mitchs-mailbox","category-private-client-group"],"acf":[],"_links":{"self":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/6276","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/comments?post=6276"}],"version-history":[{"count":1,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/6276\/revisions"}],"predecessor-version":[{"id":11027,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/6276\/revisions\/11027"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=6276"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=6276"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=6276"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}