The term tax

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The word tax refers to any financial fee levied or enforced on a legal body or person, who is referred to as the taxpayer in this situation. A tax can be direct or indirect, and it can be paid in money or labour equal to the tax. Income taxes are imposed on financial earnings earned by various bodies in different jurisdictions. Corporate income taxes, on the other hand, are imposed on businesses based on their earnings. Corporate taxes should only be collected on legitimate enterprises that are independent from their owners. In the United States, president Trump has initiated a number of policies that touch on a wide range of issues. Among the policies that Trump’s administration has initiated are the individual and corporate income tax. President Trump has also come up with a policy on infrastructure. This essay discusses the policies that Trump has initiated in relation to their effects on the specific individuals they affect. The three policies that the essay will discuss are the individual and corporate income tax and infrastructure development spending.

When it comes to individual income tax, Trump has developed a policy that attempts to reform the existing tax codes (www.businessinsider.com). Analysts argue that the proposed tax policy on income appears to suggest that there will be major tax cuts on individual income. Such a cut has never been witnessed since the days of president Reagan. Though the tax policy is contained in just a page document, a lot remains unclear from the face value unless a detailed analysis is done to the tax policy. For starters, the proposed policy intends to revise the existing tax brackets from seven to just three. The proposed tax brackets will be 10 percent, 25 percent, and 35 percent which are otherwise different from the initial rates that Trump had proposed during his campaign. These tax plans do not spell out exactly where every individual tax bracket will fall in relation to the wage brackets.

Such proposals do not give a clear outline on how they will be carried out. The tax brackets do not outline what wage brackets will fall in any of these tax brackets (lombardiletter.com). Such proposals leave the taxpayers at a risk of exploitation by various agencies. In the event that there is no clear outline on how the tax brackets will be classified when it comes to various wage groups, implementation of the proposed tax policy becomes a problem. In such a case, therefore, the government stands a chance of losing big due to omissions when it comes to the collection of taxes. The taxpayers also stand a chance of losing in the event that those charged with the responsibility of implementing the policy misinterpret it. Those who are supposed to pay less tax may end up paying more than expected. Either, those who are supposed to pay more might end up paying less due to misinterpretation of the shallow law. The policy, therefore, needs to be more clear and outline every specific issue to avoid such lapses occurring.

There is also the issue of standard deductions that appears to double under the proposed policy by Trump’s administration. As it stands currently, single individuals filing tax returns do so on the basis of a standard deduction of $ 6,350 while for married couples it stands at $12,700 (www.businessinsider.com). Trumps administration has proposed that single persons filing their tax returns do so on the basis of a standard deduction of $15,000 and for married couples, it stands at $ 24,000. When the standards upon which tax deductions are pegged doubles, there is always a loser and a winner. In such a scenario, the taxpayers tend to win in Trump’s tax policy while the government stands to lose. The doubled standards upon which tax deductions are pegged will ensure that the total amount of tax that the citizens pay will greatly reduce. This will ensure that the disposable income of the taxpayers increases as they will be left with more to spend. The government, on the other hand, stands to lose since the amount of income it receives from income tax will reduce significantly.

When it comes to itemized deductions, Trump’s policy has targeted the wealthiest where he intends to cap itemized deductions (www.theatlantic.com). The capping has been pegged at $100,000 for single individuals who are filing tax returns and $200,000 for married couples filing tax returns jointly. The policy goes further into saying that the tax breaks that have benefited the wealthiest over the years will be eliminated. Though there is no clear guideline still on this policy, Trump is determined to see the wealthiest individuals within the society pay more taxes as opposed to what they pay currently. Under this policy, the wealthiest individuals within the society stand a chance to lose since the amount of tax they have been paying will significantly increase. The government stands to gain as the total amount of income it has been receiving from such tax will increase.

When it comes to the corporate tax, Trump’s proposal has elicited various reactions with analysts arguing that it might not be good for the economy. Trump’s administration has proposed a corporate tax cut from the current 35 percent to 15 percent (www.washingtonpost.com). Such a policy will ensure that the total amount that various corporations contribute to the national revenue through taxation reduces drastically. The winner in this tax policy will be the business corporations since the amount of tax they have been paying will reduce. This will leave them with a bigger proportion of their profits for purposes of reinvesting and improving their businesses. The government, on the other hand, stands to lose since the amount it receives from these corporations reduces. This has the effect of leaving the government with budget deficits which might pose a challenge when addressing the issue of budget deficits.

There is also the issue of infrastructure which the Trump administration has developed a policy on. Trump’s policy suggests that he will spend $ 1 trillion on infrastructure. This, the Trump administration plans to achieve through a number of cuts (www.commercial.jpmorganchase.com). First, the proposal seeks to ensure there is a public-private partnership. The public-private partnership is aimed at ensuring the public cost is minimized as much as possible. Through such a partnership, the rural communities stand a greater chance of losing. This is because the $ 500 million a year that they have enjoyed for a very long time is set to be eliminated. Either, this goes further to ensuring that the sewer, water, trash and street drainage that the local communities have built and maintained over the years will suffer significantly as there will be little or no money to continue with these programs. Either, such a policy does not appear to have been embraced by a number of rural constituents who feel that they will be denied an opportunity to grow and develop their infrastructure at the rate in which it has developed over the years. This, therefore, means that the policy might fail at its inception.

In conclusion, therefore, the three policies discussed in this essay shows how ambitious Trump’s administration is. There are those policies that go a long way in improving the conditions of the citizens while there are those that do not improve the citizens’ conditions. The policies are simplistic and to some extent do not offer clarity in the manner in which they will be implemented. Either, the missing pieces of information concerning the execution of these policies leaves the policy implementers at liberty to interpret them according to their understanding. Such a scenario might not help in the long run as the intended purpose might not be achieved. The administration, therefore, needs to do more in terms of making the policies more understandable with their scope of operations made clearer than they are currently.

Works Cited

https://www.lombardiletter.com/this-is-how-donald-trumps-tax-plan-will-impact-the-economy/7353/

http://www.businessinsider.com/who-will-save-money-lose-trump-tax-plan-2017-2/#but-head-of-household-filers-as-a-group-fare-the-worst-on-average-its-not-a-huge-increase-but-these-filers-who-earn-between-20000-and-200000-will-see-their-federal-taxes-go-up-rather-than-receiving-a-tax-cut-for-many-of-these-families-though-every-dollar-counts-7

https://www.theatlantic.com/business/archive/2017/01/trump-corporate-tax-cut/514148/

https://www.washingtonpost.com/business/economy/trump-seeks-15-percent-corporate-tax-rate-even-if-it-swells-the-national-debt/2017/04/24/0c78a35c-2923-11e7-be513fc6ff7faee_story.html?utm_term=.cec2cbf963f2

https://www.washingtonpost.com/business/economy/economists-pan-infrastructure-plan-championed-by-trump-nominees/2017/01/17/0ed1ad5e-dc5e-11e6-918c-99ede3c8cafa_story.html?utm_term=.179c98be5484

https://commercial.jpmorganchase.com/pages/commercial-banking/executive-connect/impact-infrastructure-spending

November 09, 2022
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Tax Money Company

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