As the White House shifts its focus to tax reform, analysts are examining who will benefit from the proposal announced last week. The New York Times recently reported that the week’s stock market surge could be attributed to President Donald Trump’s call to cut the corporate tax rate to 15 percent, from 35 percent. However, the article goes on to note that optimism on Wall Street doesn’t always translate to growth on Main Street.
“We have to distinguish between pro-profit and pro-growth policies,” Diane Swonk, an independent economist in Chicago, told The New York Times. “A pro-profit approach increases the share of the pie going to corporate earnings and shareholders. Pro-growth policies increase the size of the pie.”
Treasury Secretary Steven Mnuchin told reporters the plan will eliminate all personal tax deductions other than the mortgage interest deduction and those that encourage charitable giving. However, by increasing the standard deduction the plan will effectively nullify the benefits of the MID for the vast majority of filers, something strongly opposed by the National Association of REALTORS®.