What's in Trump's tax reform

Tommy Tucker, WWL First News
Thursday, September 28th

Tommy talks to Howard Gleckman, a Senior Fellow in the Urban-Brookings Tax Policy Center at the Urban Institute, about the GOP's tax reform plan.


Transcript - Not for consumer use. Robot overlords only. Will not be accurate.

Something and it affects us all in that is tax reform good morning Howard. Now don't say anything about any other Howard Blackmon is the senior fellow trust me don't say anything about it. Is senior fellow in the urban Brookings tax policy center at the urban institute. Good morning Howard more or how well tell me about the president's tax plan or do we have enough deet tails to who really know about it other than. Basically like a one cheats in his who wanted to do. Yes let's not really a plan that it's kind of an outline or framework where everyone to call it but we know some details but there's an awful lot we don't know. So we know that the president wants to create three individual patriots' 12% 25% 35%. In May be you want to create a fourth straight maybe doesn't. Let me jump they would some questions attorney Howard. How many do we have now. No we are seven. And they start at ten civil post the lowest tax bracket now or 10% it actually increase that to 12%. But I operate now or 39 point 6% he cut that to 35 the less he has to fourth grade and then maybe you'll. And it's a little strange. That on the business side. And your reverence to kind of business is as big corporations. And they paid actually now that I operated 35%. He reduced that to 20%. And then you have more ethical pastors and those are partnerships and sole proprietor ships in the and and and businesses. The business doesn't pay any tax at all but the owners of the business contacts and their individual returns. They pay at the individual cartridge which means that took 39 point six. And under this proposal that would 2.5 cents a big tax cuts for those kinds of businesses and their things like. A big medical practices law firms. Accounting firms and then some companies that you think goes partnerships that they are likely a crisis is an opposite partnerships of their capture would go onto. Mom is explain the Alternative Minimum Tax for people don't know and would that go way would it change you wooded. Remain as it is. So they'll turn a minimum taxes they separate parallel tax system. People who make more than about a 100000 dollars and up to about 600000 dollars. May be subject to the tax. What it does essentially is that it is a limited future ability to take certain kinds of deductions like state local tax deduction. Mortgage deductions some others. Sort you go to essentially you've got to do your taxes twice. And figure out whether or not you're you have to pay the Alternative Minimum Tax or not. It just under the alternative attached to repair a minimum rate of 28% or sometimes two point 6%. So it apparel system it's a pain in the neck it does increased tax liability for a lot of upper middle income people. And this proposal would get rid of. Do you have to do your taxes twice so I guess the question is. Can you take whatever is lower the alternative minimum deduction awards. Cooper you know deductions AM Waco and itemized in can you take the one that benefits you. More or do you have to use a one a benefits the government more. Go use along the benefits the government more to do it twice in table one of the most. And for people you know there that the the general rule is people live in high tax states or people who have a lot of kids. Because a lot to deductions that they would lose. Those are the ones who end up getting hit by the AT&T. But if they let the AMT is it will collect a lot of it war injuries ever get out you know. And so it's it's it's such complicated and bullying kind of attacks because middle income and upper middle income people lot of money. And one of the good things about central proposal does he get rid of. The one what do you what do you mean once you're in you can't get out even if your income drops. Often heated electric drops a lot. You you really won't get out you're really going to be stock. Or you move you to mortal attack state and delicate chip out or you know you'd kids can draw up the Java house now did you. Different circumstances don't change very much you're you're pretty much strapped. So it's kind of like dumb. The movie what was it goodfellas money as they answer from Philly that's. Let's talk about the majority of income. In this country. And who would benefit from this sketchy details on a mean and a majority of way ideas mean that it is sketchy outline who would benefit from this most and who wouldn't hurt most. Yes that's the bottom line everybody wants to know what's this mean for me. And it it's it's really hard to know because are so many details that are missing from this proposal put in general kind of united general look. If you are. Low income so you make less than 2530000. Dollars a year. He's the taxi Japan has proposal are going to be pretty much the same juppe negatives you very much difference ought things change. So they can figure that doubles sizes standard deduction they can get rid of personal exemptions. They're gonna change will raise its actually go up a little bit they may increase the child tax credit that matters to there was kids. So removal was awful but in the end the tax argument that you pay is probably not gonna change too much. If your middle income person making say between forty and 80000 dollars a year. Pretty much the same story. Things to move around a little bit you may lose a few deductions that you currently get. Captured may change a little bit. But the story is pretty much saying you may pay a little bit less in taxes than you do today probably not a whole lot. I'm intended for second tornado thirty K you said about the same forty to eighty. I mean what does it stands now what cunning greasy timeout eighty dosing years 200 miles a year. Well so sure we'd look at. A proposal was similar to this house Republicans came up with 2016. And in the in this proposal roughly based on that there's some differences with the moralists think it. And the other numbers you throw pretty close so from middle income Parcells will be making between 48000. You get a buy an extra 250 bucks. Then you go to the top and you talked about the top 1% those people making more than 700000. Dollars a year and the top 110. Percent and we would have ensue once me between eight and 80000 and the next level whatever it is okay. Well I excellence at top levels over a hundred plot. Look at real tossed 700 plus and in the top 110 percentage of people make in point three million and up to people at the top 1% we're gonna do really really well. Because of the tax cuts. Those pastor companies lose those sort of partnership and they're gonna that's gonna really helped a lot getting review and he's gonna help from a lot. So they're gonna do very very well this proposal. That you get the people who were not super rich but doing really well. Those are the hardest ones trust and figure out without seeing more details I think they're gonna pay if you were taxes. But they're probably not gonna do as well as people prefer talked to give you a sense of what we're talking we talked about middle income people get about 20250. Bucks. Less in taxes people in the top 1%. We're gonna take something like 300000 dollars less. Intact troopers there were four council perhaps yeah yeah yeah. So that's again that's why exactly this proposal but it's a proposal to what planet looks a lot like. So yes in the ballpark. If you wore a really successful doctor are you have a good you know real estate partnership for its funders like that you're gonna love this proposal. So what if you're an individual real after running your fruit Dino I don't even asked a question let me give you less words. Your take on the plan and any in any final statements I guess. Yes it would take on the planet is a lot of holes over the next several bullets were gonna have to find out what it really does. But on average. For from most people in this country not gonna change things a whole lot for people the very top it's going to be groups weeks. So what about the revenues debt knowledge that. So we haven't yet figured out what it's gonna cost but I wouldn't be surprised if it's going to be somewhere in the neighborhood of three trillion dollars four trillion dollars over the next ten years. And and that's gonna add to the debt because so forum Q&A way to pay for more important things about this pose a real quick is. What's missing is they never say how they gonna pay for all attacks that say they're gonna pay reform but didn't oversee how. And that's that's the tough Parton group were aware about there over the next several months. Thank you Howard Howard Glickman senior fellow in the urban Brookings tax policy center at the urban institute.