Estate Tax Now: The current law says if you’ll be passing on $5.45 million or less, then your heirs won’t have to file a federal estate tax return.
But, if you’re passing on to your heirs more than $5.45 million (you’d be in the 2/10ths of 1% of all tax returns, one of about 4,700 in 2013) or if you’re a billionaire, then an estate tax will be paid by those who receive the estate. The notion being, a democracy should allow hereditary wealth up to a point, but a nation that increasingly concentrates wealth isn’t likely to enjoy a healthy future or to continue as a democracy.
Trump/Republican Estate Tax Proposal: The Trump/Republican Plan would eliminate the estate tax; so, presumably Trump’s heirs wouldn’t pay an estate tax. Heirs of many other millionaires and billionaires wouldn’t either, leaving the American people with approximately $19.3 Billion per year more debt or a comparable loss of education, health care, Social Security, crumbling infrastructure, etc. each year.
Pass-Throughs Now: Pass-throughs are for sole proprietorships, partnerships, and S-corporations and have their income “pass through” to their owners to be taxed under the individual income tax rates, i.e. as “regular” income, meaning the same rate as salary and wage income. An example, the owners of the $31.4 Billion Bechtel Corp, the largest engineering company in the US and an S-Corporation, file their income from the company on their personal tax returns and pay at the personal rate for “regular” income. The Trump Organization is an S-Corporation.
Trump/Republican Pass-Throughs Proposal: The Trump/Republican Plan would – for sole proprietorships, partnerships, and S-corporations – euphemistically referred to as “small businesses” – reduce taxes from the current 39.6% cap on individual income to 25%, creating a special 25% tax rate for pass-through “small” businesses. Say The Trump Organization brought in $100,000,000 in profits in a year, then the Trump/Republican proposal would yield an additional $14,000,000 per year to Trump and leave the American people owing $14,000,000, i.e. $14,ooo,ooo in further debt each year or a comparable loss of education, health care, Social Security, crumbling infrastructure, etc. each year.
The Alternative Minimum Tax (ATM) Now: The ATM addresses the problem that occurs when exemptions are created to lower income taxes for “special” circumstances, essentially creating special tax breaks, “incentives” and loopholes for targeted individuals and businesses. The ATM creates an “alternative minimum tax” that folks have to pay no matter how many tax breaks, loopholes, “incentives” or what not they’re able to wrangle. In 2005, the ATM effectively kept Trump from using many of the targeted loopholes, tax breaks and “incentives” to zero-out his taxes and cost him $31 million in taxes.
Trump/Republican Alternative Minimum Tax (ATM) Proposal: The ATM is eliminated under Trump/Republican proposal would eliminate about $ 38,000,000,000 in annual revenue (the ATM brought in $38 Billion in 2017). So, eliminating the ATM leaves Americans either another $ 38,000,000,000 per year in debt or losing $ 38,000,000,000 in health care, education, infrastructure, retirement income, etc.
Source on ATM: http://www.businessinsider.com/trump-abolish-alternative-minimum-tax-2005-return-2017-3
Source on Amt ATM brings in annually:
http://www.taxpolicycenter.org/briefing-book/how-much-revenue-does-amt-raise
Source on Estate Tax:
https://taxfoundation.org/estate-tax-provides-less-one-percent-federal-revenue/