2015: Trump Suggested A “Fair Tax Or A Flat Tax” Would Help “Simplify Things.” According to Fox News, “TRUMP: Well, you have groups that lobby and they fight and they want to get deductions and they want to get all sorts of other things. And in the end, it gets to be so expensive and the rates keep going up, and at one time they were higher, and now they’re a little bit lower, but then they get increased again. And it’s just a very, very complicated thing and you need an I.Q. of about 180 to figure it out. And people can’t figure it out. It would be nice to put all these preparers out of business, to be honest with you, because that’s what should happen. We will see that what happens. But a fair tax or a flat tax or somebody -- in Europe, they do the VAT tax, which actually is pretty simple, based on consumption, and it does simplify things a lot. It’s got its big advantages, some disadvantages.” [“Your World With Neil Cavuto,” Fox News, 4/15/15]
Trump Said, “We Can Leave The Tax Code The Way It Is And Simplify It, Or You Could Go To A Form Of A Flat Tax. You Could Go To A Fair Tax.” According to an interview of Donald Trump in Time, “Donald Trump was interviewed by TIME Editor Nancy Gibbs, Washington Bureau Chief Michael Scherer, and political correspondent Zeke Miller on Aug. 18. […] Are you willing to sign the “No New Taxes” pledge of Grover Norquist? Well I’m thinking about it but I have a problem because I may want to switch taxes around. I want to save the middle class. And I have hedge fund guys that are making a lot of money that aren’t paying anything, okay. And I don’t know how his pledge relates to that. But I know a lot of bad people in this country that are making a hell of a lot of money and not paying taxes. And the tax law is totally screwed up. The complexity of it, the size of it. I mean I spent millions of dollars every year on lawyers and accountants just to do a tax return. And I want to put H&R Block out of business. I want to make it very simple. And we can leave the tax code the way it is and simplify it, or you could go to a form of a flat tax. You could go to a fair tax. There’s a lot of things you could do.” [Time, 8/20/15]
2015: Trump Retweeted “We Need Flat Tax #Vote 4 Donaldtrump.” According to a tweet from @realDonaldTrump, “‘@Finenco: Rand Paul #speech is a repeat of every other #politician. Heard it before @TexasGOP @nytimes We need flat tax #Vote 4 DonaldTrump” [Twitter - @realDonaldTrump, 4/8/15] [Trump Twitter Archive, Accessed 2/8/23]
2015: Trump: “In Europe, They Do The VAT Tax, Which Actually Is Pretty Simple, Based On Consumption, And It Does Simplify Things A Lot.” According to Fox News, “TRUMP: Well, you have groups that lobby and they fight and they want to get deductions and they want to get all sorts of other things. And in the end, it gets to be so expensive and the rates keep going up, and at one time they were higher, and now they’re a little bit lower, but then they get increased again. And it’s just a very, very complicated thing and you need an I.Q. of about 180 to figure it out. And people can’t figure it out. It would be nice to put all these preparers out of business, to be honest with you, because that’s what should happen. We will see that what happens. But a fair tax or a flat tax or somebody -- in Europe, they do the VAT tax, which actually is pretty simple, based on consumption, and it does simplify things a lot. It’s got its big advantages, some disadvantages.” [“Your World With Neil Cavuto,” Fox News, 4/15/15]
1986: Congress Passed The Kiddie Tax As A Way To Prevent Parents From Transferring Wealth To Their Children As A Way To Avoid Taxes. According to the Wall Street Journal, “Congress passed the Kiddie Tax in 1986. Until then a parent could, say, give a child appreciated stock and the child could sell it, pay tax at lower rates, and use the proceeds to pay for college tuition or a Corvette. The 1986 provision levied the Kiddie Tax on a broad range of children’s ‘unearned’ income above an exemption, which currently is $2,200. Above that amount, the children owed tax at the parents’ rate. The levy has never applied to a youngster’s earnings from being a camp counselor or designing websites.” [Wall Street Journal, 5/10/19]
2017: Trump’s Tax Plan Changed The Kiddie Tax Rate From The Parent’s Rate To Trust Tax Rates, Resulting In A 37 Percent Tax On Income Over $12,751. According to the Wall Street Journal, “Many features of the 1986 Kiddie Tax were complex, however. To simplify, the 2017 overhaul switched the Kiddie Tax rate from the parents’ rate to trust tax rates. These kick in at a very low level of taxable income: For 2019, the top rate of 37% takes effect at just $12,751.” [Wall Street Journal, 5/10/19]
2018: After The Death Of Her Husband, Rebecca Headings Paid A Top Rate Of 12 Percent On Her $55,000 In Income While Her Son Paid 37 Percent On His $29,300 In Annual Survivor’s Benefit. According to the Wall Street Journal, “Rebecca Headings’s husband, U.S. Navy Senior Chief Petty Officer Gary Headings, died of a heart attack at age 39 in 2017. After Mr. Headings’s death, his son began getting an annual survivor’s benefit paid to many families who have lost active-duty service members—often called Gold Star families. Last year, that benefit was about $29,300. But his son, age 6, owed nearly $7,000 in federal taxes on it. ‘At first I was stunned, and then angry. My child’s tax rate is higher than mine,’ says Ms. Headings, a social worker in Virginia Beach. Ms. Headings’s top rate on her 2018 income of less than $55,000 was 12%. Her son’s top rate is 37%. In past years, her son’s tax bill would have been far lower. But a 2017 change to the so-called Kiddie Tax often boosts rates on ‘unearned’ income received by children of middle- and low-income families—including her son.” [Wall Street Journal, 5/10/19]
College Students From Low-Income Families Who Received Financial Aid Technically Owed Taxes On It At Trust Rates Under The TCJA’s Kiddie Tax. According to the Wall Street Journal, “The Kiddie Tax revision also threatens college students from lower-income families who receive financial aid for expenses other than tuition and supplies. By law such income is taxable, says Tim Steffen, a tax specialist with Robert W. Baird & Co. If a family is in a low tax bracket, then a child receiving taxable aid could wind up in a much higher bracket—with no money to pay the tax. Mark Kantrowitz, the publisher of Savingforcollege.com, estimates that more than three million students could be affected.” [Wall Street Journal, 5/10/19]
Increased Taxes On Homeowners And Higher Deficits Caused By Trump’s Corporate Tax Cuts Lead To 4 Percent Reduction In Home Prices Over Seven Years (Average Outstanding Mortgage Length). According to ProPublica, “Here’s how it works. Zandi took what financial techies call the ‘present value’ of the property tax and mortgage interest deductions that homeowners will lose over seven years (the average duration of a mortgage) because of changes in the tax law and subtracted it from the value of the typical house. That results in a 3% decline in national home values below what they would otherwise be. The remaining one percentage point of value shrinkage, Zandi says, comes from the higher interest rates that he says will result from the higher federal budget deficits caused by the tax bill. He estimates that rates on 10-year Treasury notes, a key benchmark for mortgage rates, will be 0.2% higher than they would otherwise be, which in turn will make mortgage rates 0.2% higher. Even though interest rates on 10-year Treasury notes are at or near record lows as I write this, they would be even lower if the Treasury were borrowing less than it’s currently borrowing to cover the higher federal budget deficits caused by Trump’s tax bill. If Zandi’s interest-rate take is correct — it’s true by definition, if you believe in the law of supply and demand — even homeowners who aren’t affected by the inability to deduct all their real estate taxes and mortgage interest costs are affected by the tax bill. How so? Because higher interest rates for buyers translate into lower prices for sellers and therefore produce lower values for owners.” [ProPublica, 10/10/19]
Trump Tax Plan Would Eliminate Deductions For Gambling Losses, Interest Expense, Union Or Club Expenses, Moving Expenses, And Unreimbursed Employee Expenses That Accounted For More Than 2 Percent Of A Filer’s Gross Income. According to Business Insider, “Part of President Donald Trump's tax reform outline released on Wednesday would do away with itemized deductions on individuals' tax returns except for the mortgage and charitable giving deductions. Here's a rundown of the itemized deductions this plan would cut: […] Gambling losses: […] Interest expense: […] Union and/or Club expenses: […] Moving expenses: […] Miscellaneous expenses: If an expense on the Internal Revenue Service’s list, including tax preparation fees and unreimbursed employee expenses, accounts for more than 2% of a filers gross income, it can be deducted.” [Business Insider, 4/26/17]
TCJA Eliminated “Miscellaneous Itemized Deductions […] Tax Preparation Fees, Investment Fees, Hobby Losses, Job Search Expenses, Safe Deposit Boxes And Unreimbursed Business Expenses.” According to Kiplinger, “The Tax Cuts and Jobs Act lowered tax rates and nearly doubled the standard deduction, which is expected to reduce taxes for about 65% of taxpayers, according to the Tax Policy Center. But an estimated 29% of Americans will see no change to their tax bill, and 6% of you will pay more. If you’re one of the unfortunate taxpayers who don’t get a lower tax bill, it might be because the tax overhaul scrapped or capped some popular tax breaks. Here are 8 common tax deductions that were repealed or limited by the new tax law. […] Miscellaneous Itemized Deductions These deductions included the write-off for tax preparation fees, investment fees, hobby losses, job search expenses, safe deposit boxes and unreimbursed business expenses. Previously, taxpayers could deduct these expenses if they exceeded 2% of their adjusted gross income. The loss of these deductions could be particularly costly for employees with significant unreimbursed business expenses. For example, an employee who uses his or her own car to visit clients—and isn’t reimbursed for the mileage—could end up with a higher tax bill this year. The change could also prove costly for employees who work remotely, since they’ll no longer be allowed to deduct the cost of maintaining a home office. (The new tax law doesn’t affect the ability of self-employed workers to claim a home-office deduction.)” [Kiplinger, 1/16/19]
Trump Tax Plan Would Eliminate Deductions For Expenses Related To Casualty And Theft Losses, Tax Preparation Fees, Job Search Expenses, And Car Registration Fees. According to the Detroit Free Press, “The Trump plan calls for eliminating all tax deductions on individual tax returns — except the deduction for home mortgages and charitable gifts. If you itemize, as many middle class families do, you're going to want to watch this potential change. […] But under Trump's plan, many tax deductions would vanish — including the deduction on medical and dental expenses, real estate taxes, casualty and theft losses, expenses related to tax preparation fees, expenses relating to job hunts, a deduction for the amount that individuals pay for state and local income taxes and the value-based portion of car registration fees.” [Detroit Free Press, 4/26/17]
The TCJA Eliminated The Casualty And Theft Deductions Outside Of Federal Disaster Areas. According to Kiplinger, “The Tax Cuts and Jobs Act lowered tax rates and nearly doubled the standard deduction, which is expected to reduce taxes for about 65% of taxpayers, according to the Tax Policy Center. But an estimated 29% of Americans will see no change to their tax bill, and 6% of you will pay more. If you’re one of the unfortunate taxpayers who don’t get a lower tax bill, it might be because the tax overhaul scrapped or capped some popular tax breaks. Here are 8 common tax deductions that were repealed or limited by the new tax law. […] Casualty Losses If a tree fell on your home last year, you probably won’t be able to deduct losses that aren’t covered by insurance unless a hurricane knocked it down. The tax overhaul eliminated this deduction unless losses were the result of a federally declared disaster, such as hurricanes Michael and Florence in the Carolinas or the Camp wildfire in northern California.” [Kiplinger, 1/16/19]
The TCJA Eliminated Job Search Expenses Deduction. According to Kiplinger, “The Tax Cuts and Jobs Act lowered tax rates and nearly doubled the standard deduction, which is expected to reduce taxes for about 65% of taxpayers, according to the Tax Policy Center. But an estimated 29% of Americans will see no change to their tax bill, and 6% of you will pay more. If you’re one of the unfortunate taxpayers who don’t get a lower tax bill, it might be because the tax overhaul scrapped or capped some popular tax breaks. Here are 8 common tax deductions that were repealed or limited by the new tax law. […] These deductions included the write-off for tax preparation fees, investment fees, hobby losses, job search expenses, safe deposit boxes and unreimbursed business expenses. Previously, taxpayers could deduct these expenses if they exceeded 2% of their adjusted gross income.” [Kiplinger, 1/16/19]
Trump Tax Plan Sought To Eliminate Tax Deductions For Medical And Dental Expenses. According to the Detroit Free Press, “The Trump plan calls for eliminating all tax deductions on individual tax returns — except the deduction for home mortgages and charitable gifts. If you itemize, as many middle class families do, you're going to want to watch this potential change. […] But under Trump's plan, many tax deductions would vanish — including the deduction on medical and dental expenses, real estate taxes, casualty and theft losses, expenses related to tax preparation fees, expenses relating to job hunts, a deduction for the amount that individuals pay for state and local income taxes and the value-based portion of car registration fees.” [Detroit Free Press, 4/26/17]