CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more. favicon LAWANDTAX-NEWS.COM


Articles »

Country Home Pages

British Virgin Islands
Hong Kong
Isle of Man
South Africa

Daily Tax Quote

Lowtax Network Sites
Lowtax Network Portal: 'Low-tax' business and investment in the top 50 jurisdictions covered in exceptional detail.
Tax News: Global tax news, continuously updated through the day.
Expat Briefing: A free online publication serving international expatriates and featuring world news, forums, events, in-depth country information and reliable investment and personal taxation guides.
Law & Tax News: Daily news and background data on tax and legal developments for international business.
Offshore-e-com: A topical guide to offshore e-commerce focused on tax and regulation.
Lowtax Library: One of the web's largest and most authoritative business and investment information sources.
US Tax Network: The resource for free online US taxation information, covering: corporate tax, individual tax, international tax, expatriates, sales and e-commerce tax, investment tax.
Offshore Trusts Guide: OTG publishes news, features and newsletters on the use of offshore trust structures.
TreatyPro: Online tax treaty resource.
Global Incorporation Guide [GIG]: A BSI / Lowtax Network international business smart tool.
Study Looks At US Tax Reform Revenue Gap

by Mike Godfrey,, Washington Thursday, July 13, 2017

The Tax Policy Center (TPC) has said the Trump Administration's plan for tax reform could reduce federal revenues by as much as USD7.8 trillion over the next decade.

The TPC modeled tax cuts which were "consistent with those the Trump Administration outlined in April." This is the figure if revenue-raisers are not included. During the second decade, the cost to revenues would be USD13.1 trillion, it said.

The TPC noted that it "could not model an actual Trump tax plan since far too many critical details are unknown," but was able to model "a stylized version of what the key elements of a Trump plan might look like." This included: a tax rate of 15 percent on businesses, including pass-throughs; a territorial tax system; a one-time tax on unrepatriated foreign earnings; reduced individual income tax rates; a doubling of the standard deduction; and repeal of the Alternative Minimum Tax, estate tax, and the 3.8 percent Medicare surtax.

However, even when accounting for tax increases included in the April outline and those suggested by Donald Trump during the 2016 Presidential campaign, the TPC estimated that the plan would be far from revenue neutral. These measures included repealing all itemized deductions except for charitable giving and mortgage interest, repealing the personal exemption and head of household filing status, repealing certain business tax preferences, a tax on capital gains at death, and a tax on distributions from pass-throughs.

Including these revenue-raisers would cut the revenue cost of reform to USD3.4 trillion over the first decade and USD5.9 trillion in the second.

In addition to the impact on revenue, TPC analyzed the effects on households. "A Trump-like tax plan would be highly regressive with or without the revenue raisers," said Howard Gleckman, a senior fellow at the TPC, adding that there would be "moderate tax cuts for low- and moderate-income households and big tax reductions for the highest-income households."

However, according to Gleckman, not everybody would experience a tax cut under the President's proposals. "Interestingly, with the revenue raisers, about 20 percent of households would face higher taxes than under current law," he concluded.

Important Notice: Wolters Kluwer TAA Limited has taken reasonable care in sourcing and presenting the information contained on this site, but accepts no responsibility for any financial or other loss or damage that may result from its use. In particular, users of the site are advised to take appropriate professional advice before committing themselves to involvement in offshore jurisdictions, offshore trusts or offshore investments.

All rights reserved. © 2017 Wolters Kluwer TAA Limited