The 1 Percent Are the Only Winners in the Trump Tax Bill

Rumors and half-truths have been flying around for over six months about the proposed Trump tax bill. The administration assured Americans that the proposed tax bill will be a great improvement to the current tax bill. If you thought the proposed tax bill was bad, it has been confirmed - it is worse than you thought. Unfortunately, the 1% win again and the 99% are the losers. Here is a summary of winners and losers in the Trump tax bill. How to fix it - show your views about the Trump tax bill be voting during the next local, state and presidential elections. 

HEALTH INSURANCE

The health insurance penalty will be removed which will lead to a lower number of people who sign up for health insurance. This will lead to an increase in health insurance premiums for remaining subscribers. In addition, approximately 30 million taxpayers would lose their healthcare coverage due to a reduction in government funding for the Affordable Care Act. Medicaid funding will be reduced by $610 billion.

LOCAL AND STATE TAX

The deduction for local and state taxes will be eliminated. State taxes are not deductible under the alternative minimum tax.

INCOME TAXES

Taxpayers with incomes less than $30,000 would be taxed the most in 2019. Incomes starting at $30,000 will be taxed the least. Taxpayers with incomes of $50,000 or more will receive a tax cut in 2019 and will receive more than $500 extra in their tax refund.

The child tax credit will be increased from $1,000 to $2,000 but wealthy taxpayers benefit the most from the increase.

SOCIAL SERVICE PROGRAMS

Funding to social service programs such as SNAP and TANF that provide food and other benefits for low-income taxpayers and the Pell Grant which provides financial aid for college students would be greatly reduced. Almost $1.2 trillion would be reduced from all these programs.

TAX BRACKETS

The current seven income tax brackets 10%, 15%, 25%, 28%, 33%, 35% or 39.6% would be reduced to four - 12, 25, 35 and 38.5 percent. The new top income tax rate of 38.5% will be for incomes starting at $480,000, an increase from $418,000 for single taxpayers and $1,000,000 for married taxpayers, an increase from $500,000. Most taxpayers would see a 2 percent tax increase. Wealthy taxpayers’ income tax would be reduced by 5 percent.

STANDARD DEDUCTION

The standard deduction will be doubled to $12,700 from $6,350 for a single taxpayer and to $24,800 from $12,400 for married taxpayers. Personal exemptions will be eliminated such as local and state income taxes, casualty losses, and unreimbursed employee expenses.

Homeowners

The homeowner deduction will be limited to $500,000 for first-time mortgages. Mortgages on second homes will no longer be tax deductible. Deduction for interest on home equity debt will be eliminated. There will be a $10,000 cap on the deduction for real estate taxes.

Real Estate

Real estate developers will receive additional tax breaks such as a shorter depreciation schedule. Royalty payments, rental income and licensing fees will get new rates for pass-through income to avoid paying taxes on the money.

ALTERNATIVE MINIMUM TAX

The alternative minimum tax is repealed which will allow wealthy taxpayers to avoid paying a minimum tax.

ESTATE TAX

The estate tax exemption threshold will be increased to estates with less than $11.2 million who will not be taxed.