- Donald Trump’s plan to cut corporate taxes is a step in the right direction
- His plans for personal income tax, however, could make things worse
- The U.S. economy will suffer unless Mr. Trump commits to free-market policies
United States President Donald Trump has confirmed the broad outline of his proposed tax policy, and it is consistent with what he promised during his campaign last year. The good news is that the plan would cut the corporate income tax rate from 35 percent to 15 percent. It would also introduce three marginal income tax rates for individuals, at 10 percent, 25 percent and 35 percent, while reducing some benefits and deductions for high-income earners. Regrettably, until now the White House has not provided any details: it is not clear what the new tax brackets will be, nor do we know much about the new deductions. It is impossible to evaluate how this reform will affect individual tax burdens and government revenue.