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Looking at the impact of Trump on the federal estate tax, P.1

The election of Donald Trump as the next President of the United States was certainly a surprise for many people. Nearly a month after the election, individuals and businesses are anticipating and preparing for the changes that are likely to come. Trump has already made known to the public what his plans will be in the first 100 days of his presidency, and it is clear that there will be significant changes coming with respect to taxes.

Across the board, Trump's plan is to cut taxes, with a stated focus on middle-income Americans. For individual taxpayers, he plans to implement a three-bracket system involving rates between 12 percent and 33 percent. His stated plan retains existing capital gains rates and treats carried interest as ordinary income. He also plans to increase the standard deduction for joint and single filers, and to cap itemized deductions at $200,000. 

For businesses, Trump plans to lower the tax rate from 35 percent to 15 percent, which is available to all businesses, and to make other changes beneficial to the manufacturing industry and businesses engaged in child care or which pay for employee's childcare expenses.  

One of the changes Trump plans to make to the current tax system is to repeal the "death tax," which refers to the federal estate tax. Readers who are familiar with the federal estate tax know that the law has been in a precarious position in recent years. In 2010, President Obama signed into law a measure that set the estate tax exemption amount through 2012 and which allowed the exemption amount to default to the numbers in effect in 2001 and 2002.

In our next post, we'll look at the changes made to federal estate tax in 2012 and where things stand today, as well as Trump's plan and how this is likely to affect taxpayers

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