Republican tax overhaul could benefit US President

REPUBLICANS claim its sweeping tax cuts will benefit the middle-class, but there’s one person it could help even more.

US President Donald Trump talks about the tax reform legislation in the Grand Foyer of the White House in Washington. Picture: Saul Loeb/AFP

THE sweeping tax reforms geared towards the American middle class are a huge political victory for Donald Trump.

They could prove to be an ever bigger windfall for the President’s real estate empire.

Mr Trump was all smiles after the $1.5 trillion tax package passed the House and Senate, and declared the bill “a tremendous amount of relief for the middle class”.

The bill now goes to the President to sign.

“It will be an incredible Christmas gift for hard-working Americans,” Mr Trump said.

“By cutting taxes and reforming the broken system, we are now pouring rocket fuel into the engine of our economy.

“America is back to winning again, and we’re growing like never before. There is a great spirit of optimism sweeping across our land. Americans can once again rest assured that our brightest days are still to come.”

It’s not only the middle class who look set to benefit, with companies to enjoy a bounty from permanently lower tax rates. That includes Mr Trump’s businesses.

Mr Trump’s press secretary Sarah Huckabee Sanders admitted during Tuesday’s press briefing that the Republican tax plan “could” benefit the President.

“In some ways, particularly on the personal side, the president will likely take a big hit,” she said.

“But on the business side he could benefit. But the biggest focus for this White House is that all Americans are better off today than they are beforehand.”

The President’s real estate empire could benefit from the new tax overhaul. Picture: Evan Vucci/AP

The President has refused to release his tax returns so it remains unclear how it will exactly impact on him personally.

Ms Sanders said his returns would not be released because they were “still under audit”.

According to the New York Times, the new plan benefits Mr Trump - as well as other wealthy Americans - by raising the limits for the estate tax, which affects a few thousand uber-wealthy families each year.

The plan also raises the thresholds for the alternative minimum tax, which is a safety net designed to prevent tax avoidance. We know that in 2005, this tax forced Mr Trump to pay an extra $31 million.

WINNERS AND LOSERS

The Tax Policy Centre found that all income groups would pay less tax under the new plan.

The average American would pay $1600 ($A2090) less tax next year and their after-tax income would increase by 2.2 per cent on average.

The analysis also found that the largest cuts as a share of income would go to taxpayers in the 95th to 99th percentiles — the richest Americans.

Another analysis by the Associated Press reveals Mr Trump isn’t set to be the only winner from the sweeping overhaul.

Oil drillers would also benefit as will multi-millionaire and billionaire owners of sports teams while companies would enjoy a bounty from permanently lower tax rates.

Lawyers and accountants will also profit from the advice suddenly needed to guide clients through the tax plan.

The bill creates plenty of losers, too.

An estimated 13 million Americans are projected to lose health insurance and commuters will no longer receive a perk that has saved them money.

Some residents of high-tax states like New York, New Jersey and California will actually pay more in taxes while more than half of American households could face tax hikes in coming years.

TEAM TRUMP WINS

Companies with profits that double as the owner’s personal income would enjoy a substantial tax break.

The Trump Organization, which consists of about 500 such “pass-through” entities, would likely be taxed on these profits at closer to 30 per cent rather than pay the top rate of nearly 40 per cent.

The final bill also appears to specifically benefit the real estate sector, the bedrock of the Trump family’s wealth, with benefits extended to pass-troughs that own buildings but don’t pay wages to workers.

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