(FOX 11) - The Trump tax proposal was presented as a work in progress. Many more details are to come, but from the broad-brush presentation by Treasury Secretary Steven Mnuchin, it sounds like if you have a business you'll likely benefit from the Trump Tax proposals.
But what bout for you and me? What about for our personal income taxes? FOX 11 went to a Pasadena CPA to find out what it all means to us.
To Mike Di Pietro, what the Trump Administration is proposing is a good thing.
“Remember the government doesn’t create wealth. So every time you move to the private sector, it’s going to have an exponential effect,” Di Pietro said.
He also likes the proposal laid out by Treasury Secretary Steven Mnuchin because it helps individuals.
“To the average person if you don’t pay taxes now you’re not going to pay taxes under this act," Di Pietro said. "But if you’re a middle class tax payer and you’ve been paying a lot of taxes, you’re going to see a significant bump. Say you make $100,000 a year and you’ve been paying in the 28 percent tax bracket, that’s where most Americans are, now it’s down to 25 percent. That’s a $3,000 savings right there.”
The Trump Plan, he says, takes away virtually all deductions, right? But it's replaced by a double of the standard deduction from $12,000 to $24,000.
“So, whose it going to hurt?" Di Pietro asked. "It’s not going to hurt business. It’s not going to hurt the middle class tax payer. It’s not going to hurt the wealthy tax payer. It’s not going to make a difference to the one that doesn’t pay taxes already.”
There are unintended consequences, however. For instance, he says, “Real estate prices are going to go up dramatically.”
That's good for existing homeowners but not for those wanting to buy their first home.
“I think that this tax act is going to be so stimulative, I think it will raise the price of housing 4 percent to 5 percent per year over the next five years."
About seniors, Di Pietro added that pumping massive amounts of money into the economy could trigger inflation.
Another unintended consequence? “Inflation on fixed income is obviously not a very good thing. On the other hand, social security and others pensions are indexed to inflation so their cost of living increases will go up as well.”
Bottom line for this CPA -- a Republican who disagrees with Democrats who say it only helps the rich -- the tax plan is good for lots of people.
There is, of course, more to come as the plan is rolled out.
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