How the Trump Tax Reform Plan Will Affect You

Everyone cringes when they hear any news about taxes. The tax code has been broken for years and has constantly favored wealthy tax payers. The Trump Tax Reform Plan is no different. To ensure you concerns are heard vote in the upcoming 2018 local election and state elections and write or call your U.S Congressman. Here are nine ways taxpayers would be affected by the Trump tax reform plan.

Healthcare

The Affordable Care Act (ACA) which provided health insurance to an additional 20 million people would be repealed. The new tax bill would eliminate $1.7 trillion from the ACA over the next decade or $1.7 billion per year. Low-income and middle-income taxpayers would be affected the most. Approximately 30 million taxpayers would lose their healthcare coverage. Medicaid would be reduced by $610 billion.

Social Programs

Social programs like TANF and SNAP that provide food and other benefits for low-income taxpayers would be greatly impacted. The Pell Grant that provides financial aid for college students would be reduced. A total of $1.2 trillion would be reduced from all these programs.

Tax Increase

Low-income and middle-income taxpayers would see a tax increase. The current system of seven income tax brackets 10%, 15%, 25%, 28%, 33%, 35% or 39.6% would be reduced to three: 12, 25 and 35 percent. The majority of taxpayers would see a 2 percent increase. Wealthy taxpayers’ income tax would be reduced by 5 percent. The child tax credit and earned income tax credit (EITC) would be reduced by $38.9 billion.

Standard Deduction

Single taxpayers could deduct $12,000, and married couples could deduct $24,000, a $5,600 reduction but both groups would no longer be able to deduct additional exemptions.

Parents

Taxpayers would no longer be able to deduct exemptions for their children. However they could apply for a larger child tax credit up to $1,600 per child.

State and Local Taxes

Taxpayers would no longer be able to deduct income or sales tax and would only be allowed to deduct up to $10,000 in property taxes.

Estates

The estate tax exemption would double. Estates with asset of $11.2 million or less would not be taxed. After six years the estate tax would be eliminated entirely.

Small Businesses

The bill would favor large companies and tax income from smaller companies such as an accountants at individual rates.

Homeowners

The homeowner deduction would be limited to $500,000 for first-time mortgages. Mortgages on second homes would no longer be tax deductible.