Every year I revisit my “wish list from Congress,” and this past Christmas was no exception. I am seldom thrilled, almost always disappointed, and never sure which (or how much) has happened until I get into the meat of the matter, so to speak. For the Christmas Season of 2016, let’s see how America fared:
Wish # 1 was to restore the income tax cuts that had been eliminated under Obama: 2016 Update – Trump will cut tax rates! My wish is that changes will be retroactive to January 1, 2017.
Wish # 2 was to cut the Capital Gains Tax Rate to 10% or less for everyone: 2016 update – no rate change proposed by Trump, but the ObamaCare surtax will go away. My wish remains that capital gains rates will be lowered this year.
Wish # 3 was to index the amount of capital gains tax to the rate of inflation by eliminating taxes that are due purely to inflation: 2016 update – This hasn’t happened, and is not on any radar screen I have seen.
Wish # 4 was to privatize part of Social Security, in order to add wealth for the average American, as well as to most likely save the entire Social Security System: 2016 update – This one is going nowhere, even as the Social Security System as we know it is in progressively more trouble.
Wish # 5 was to increase the IRA deduction to at least $8000: 2016 update – In a world where our country is in fiscal disarray, we are all in need of taking care of our own futures, and the relatively small contribution limits are an impediment to that goal – no change in sight.
Wish # 6 was to raise or eliminate the $3000 annual deduction for net investment losses, or at least to raise it dramatically, and to index the limit to inflation: 2016 update – No change, no indexing, no discussion, business as usual.
Wish # 7 was to repeal all estate and gift taxes (this happened in a modified way for a year in 2010, but they came back in 2011): 2016 update – Trump proposes elimination of the Estate Tax – can he get it through Congress?
Wish # 8 was to elimination the double taxation on corporate dividends: 2016 update – No change, and I have heard no proposal from Trump or anyone else.
Wish # 9 was to eliminate the Clinton-era tax increase on Social Security benefits, up to 85% taxable for higher earners: 2016 update – No changes, and worse yet, I believe it will not be long until Social Security benefits are 100% taxable to everyone.
Wish # 10 was to eliminate the Alternative Minimum Tax (AMT): 2016 update – Trump’s plan is to eliminate the AMT – Merry Christmas, America!
If Trump gets everything, or even most of his proposed changes, we will be better off. Getting rid of the AMT and the Estate Tax, lowering tax rates, and getting more people into the work force (paying into Social Security), would create a much better environment for economic growth and stability. Cutting spending would help, too. But this is “only” a Christmas wish list, not the American Revolution. I’ll dream again next year at this time.