How Trump’s tax cuts (and hikes) will impact you, explained in one simple chart
Simplification for some, reduction for others.
Let it rain! Donald Trump pledged during his campaign to deliver tax cuts for everybody, especially for working-class Americans. And with Republicans taking charge in both the House and the Senate, it looks like the president-elect will get his chance.
But what does that really mean for you?
“First and foremost, Trump’s income tax reform is a simplification: He wants to cut down the number of tax bands from seven to three,” writes HowMuch.net’s Raul Amoros. “But simplifying is not necessarily the same as reducing taxes.”
The cost-estimating website used this chart to illustrate his point:
“As this graph demonstrates, some taxpayers would definitely benefit from Trump’s tax reform — especially those at the higher end of the income scale,” Amoros said. “There are others, however, who would see their tax rates go up. Especially those on lower incomes.”
Read: Bill Gross warns investors of the negatives of Trump’s policies.
Great news for those in the 35% and 40% brackets. Not so great for those earning less than $18,550, where, according to HowMuch.net, the tax rate would actually go up by 2 percentage points to 12%.
Those in the middle would see some mixed results.
Of note, Amoros points out that the graph doesn’t account for other aspects of Trump’s plan, like the increase of standard deductions and a cap on itemized deductions.
