Tax, the main revenue of the government, plays a
significant role of redistributing the wealth in the society. Business tax reform
has been marked as a biggest issue for years.
Last week, President Trump stated, “we’re in the process
right now of working on a major tax reform that will massively reduce taxes on
our workers and businesses.” There are a lot of different comments after the
news was released. In this article, it says that tax reform is a lot harder
than it looks because there are so many constituent interests and competing
demands to balance.
To be more specific, the House plan would lower the top pass-through rate to
25%, Trump to 15%. By doing that, the highest tax rate on regular wage income would
fall to just 33%. There are possibilities that shareholders and owners of
pass-throughs who also happen to work at those firms will be tempted to
recharacterize their paychecks as "business" income to get the lower
tax rate. Therefore, the lawmakers are
concerned about people gaming the system in this way.
This is only one of the many concerns about the tax reform. We can see that there is a long and tough way to go.
1 comment:
The article seems to develop an argument but never really finish it, or come to a conclusion. It begins with a well known fact - tax reforms are not easy, but doesn't explain anything new.
It talks about pass through businesses, but doesn't explain the concept at all.
Another article, also by CNN Money: (http://money.cnn.com/2017/02/02/news/economy/border-adjustment-tax-for-and-against/index.html?iid=EL) talks about border adjustment of taxes; subsidizing imports of products and penalizing exports as part of a larger tax reform, which I thought was interestnig.
Thanks for sharing!
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