Trump's tax reform could make him smarter

While Trump's state return wouldn't include all the details from his federal return, it would offer the public much more information about the president's potential conflicts of interest or how his finances would be impacted by his own tax cut proposal, according to supporters.

Holtz-Eakin says that while he is sympathetic to the Trump Administration's objective, it is not supported by current economic conditions. We are giving them a standard deduction of $24,000, meaning that they'll have taxable income of about $32,000. But that's not double. "It would encourage more capital investment and hiring, and it would reduce the incentive for corporations to avoid and evade taxes". The AMT is a separate tax calculation meant to ensure that richer people don't avoid paying most or all of their taxes by claiming multiple deductions and credits. How much a middle class family could expect in tax cuts, and whether the plan would be revenue-neutral. Schneiderman and Cuomo, both Democrats, have voluntarily released their tax returns for years. The reduction is larger than what House Republicans had proposed in their own plan. The top tax rate for ordinary income is 39.6 percent.

Trump's new plan is silent on this issue as well.

"If you take a median income family in America today, they earn between $55,000 and $56,000". They will find, no doubt, many people from within and without Congress eager to weigh in with fixes, suggestions, demands and more. Tax experts are skeptical, and they're backed up by history. The modified tax bill also introduced a third income bracket.

At first blush, it appears to be smaller than President Ronald Reagan's 1981 tax cut, the biggest ever.

Finally, the Trump proposal would convert the current "worldwide" global tax system into a "territorial" system under which most foreign-source income is exempt. Most everyone fears it, but it's already been so watered down as to apply only to estates worth at least $5.5 million. Under the Trump plan the affluent in those states will likely pay more. When you look at other people's tax return, even other wealthy people, their tax return is this big.

There hasn't been a major tax reform in this country for more than 30 years. "Taxpayers spend almost seven billion hours complying with" tax codes every year, and almost 90 percent of taxpayers need some help in filing their taxes, he added.

And now, Trump's administration also wants to try a similar step. Eliminating the estate tax and the AMT, in particular, will make it a hard sell.

By dropping down the corporate tax rate below the top personal tax rates, the plan will open up a troubling incentive.

Only about a third of large and mid-sized American companies pay 35 percent or more of their profits in taxes, according to an analysis of the effective tax rates reported in annual financial filings.

Rich people, including Trump, tend to report a lot of business income, Williams said. Later, Mnuchin said he couldn't promise that middle class taxes wouldn't go up under the administration's proposal. "My tax return is this high".

Treasury Secretary Steven Mnuchin, right, joined by National Economic Director Gary Cohn, speaks in the briefing room of the White House in Washington, Wednesday, April 26, 2017.

  • Larry Hoffman