A Trojan tax cut
Beware of Greeks, or wealthy Republicans, bearing gifts.
President Trump’s recent tax cut proposal has even conservatives like Sen. Rand Paul, R-Kentucky, checking their numbers.
Friday, Paul blasted Trump’s scheme on Fox News, lamenting the tax cut could actually become a tax increase for the middle class.
Certainly, everyone would like to see their taxes lowered. This delectable tidbit comes with a hook, however.
The administration’s plan calls for the elimination of the local tax deduction. It also asks for an end to the “death tax,” which sounds better in theory than practice.
If you own a house, you pay property taxes. In many states, like Arkansas, you also pay an income tax. You can claim those expenses as a deduction on your federal income tax. The Trump plan would end that small benefit.
Officially, Republicans claim ending the deduction will help offset revenue loss because of the lower tax rates. The truth may be darker. Many Republicans want to punish states with high state income tax rates. These tend to be Blue States. Either way, the middle class will bear most of the burden.
Elimination of the inheritance tax will be another jab in the eye for middle income folks.
Let’s say Mom and Dad buy property or a business for $200,000. When they die, the investment has depreciated down to a value of $20,000.
With the “death tax” in effect…
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