Predicting Trump Tax Plan's Effect on Massachusetts - NECN
President Donald Trump

President Donald Trump

The latest news on President Donald Trump's first year as president

Predicting Trump Tax Plan's Effect on Massachusetts

    processing...

    NEWSLETTERS

    The tax plan being set forth by President Donald Trump is being met with mixed reviews.

    (Published Thursday, Sept. 28, 2017)

    Everyone agrees that tax reform is desperately needed. People want fairness and simplification. But how to make that happen is where the disagreement comes in, and it's why Donald Trump's tax plan is getting mixed reviews.

    The president says his tax reform plan will deliver a middle class miracle for average American workers, but tax experts have a more subdued reaction.

    "I think there are a lot of pluses and minuses in the tax overhaul," said Mark Nichols, a certified public accountant.

    One reform everyone seems to agree on is simplifying the tax code. To that end, President Trump wants to reduce the current number of tax brackets from seven to three: 12 percent, 25 percent and 35 percent.

    "We don't know what income levels were taxed at each of the different brackets and without that, it's really hard to gauge how it will affect just about anybody," said Nichols.

    One big effect on taxpayers living in high-tax states like Massachusetts would be the proposed elimination of the personal income tax deduction for state and local income taxes.

    "That tax deduction is going to go away," Nichols said. "And without that deduction, your taxable income goes up and therefore you end up paying more taxes."

    "That's a perfect example of the sort of thing that has to get vetted, because there are going to be plenty of people, including me, who are going to think that's a bad idea," said Massachusetts Gov. Charlie Baker, a self described fiscal conservative.

    What Baker likes is the proposed cut to the corporate tax rate from 35 to 20 percent.

    "We have literally lost opportunities to land big organizations that wanted to hire thousands of people here because our corporate tax policy at the federal level is not competitive with any other organized industrial nation around," Baker said.

    Trump says he doesn't benefit from his own tax plan, but tax experts say that may be a stretch given that the top tax rate of almost 40 percent on the highest earners would go down, under Trump's plan, to 35 percent.

    Get the latest from necn anywhere, anytime

    • Download the App

      Available for IOS and Android