The Effect of Trump on Small Business and Economy

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What impacts are Trump’s economic reforms expected to cause?    

Rick Kelo, a resident of Kansas has seen various changes and reform in the American economy over the years. From the various reform policies that have been introduced by Obama’s administration and how Trump has proposed to deal with the persistent issues, there is a lot happening on the current economic horizon.

The major question right now is how Trump stands to affect the economy and what that means for various types of businesses. In the following paragraphs, Trump’s potential impact on the economy in general and small businesses in particular has been discussed.cropped-news.png

When it comes to Kansas, Rick Arthur Kelo says that things don’t look so good from the economic angle, at least at the moment. About a month back, Stephen Mnuchin and Gary Cohn, two of Trump’s important economic allies revealed the basic structure of the much-awaited tax plan. These reforms have been ambitiously called the biggest tax cuts in all of history. These are supposed to slash taxes paid by businesses and make the entire tax filing and return process easier for everyone.

Mnuchin and Gary claimed that these new taxes will stimulate further economic growth where everyone will pay for themselves. However, some members from the Kansas administration like Duane Goossen have expressed their concern at the similarities between this economic plan and the one for which Kansas reached this delirious state in the first place.

Arthur Laffer, an expert on supply-side economics since the time of Raegan is the “economic spirit” behind Trump’s economic plan. Laffer is also one of the architects behind the tax plan proposed by Kansas Governor Sam Brownback. The former member of the economic policy advisory board that assisted Reagan is widely known for the Laffer curve.

In simple words, this is derived from a theory which states that economic activity is directly tied to taxation. If the taxes are lowered, up to a certain point, it will mean more revenue. However, tax reforms based on this tax slashing theory is what is said to have brought Kansas where it is in the first place.

Therefore, while some business owners are positive about the coming change and believe that it will bring benefits for the business, there is no lack of administrators who feel that the entire country will soon be affected exactly how Kansas was. The state has been struggling to balance its books, and the tax breaks have been blamed for the situation.

Rick Kelo- Internet Information Communities

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The Internet Has Provided the Perfect Platform for Intellectual Minds to Come Together and Provide Support for Those Looking For Answers

What is an internet information community? In short, it is a community of online users dedicated to helping each other find information however pertinent or trivial, and use their skills and education to help others. There is perhaps no greater example of this than the famous question and answers forum Quora. Quora allows users to create profiles of themselves also listing their education and qualifications. Then, when questions are posted on the site, regarding literature, economics, philosophy or sport for example, experts in the field can come back with answers. It is, in some ways, like the intellectual version of Yahoo Answers.Richard Arthur Kelo

Rick Kelo is one such thinker who has taken to the forum to offer his advise and wisdom to members of the community. Today, Rick Kelo works as a tax consultant in a large American firm. His interest and studies in economics, and political history, make him an authoritative voice on such matters, where he has answered questions ranging from labor economics to socialism. For Rick Kelo, forums like Quora are important in helping to disseminate unbiased, neutral and professional ideas and opinion.

A good example of this is a recent question, which asked why there was so much wealth disparity say, between a janitor in America and a Janitor in a third World Country. Rick Kelo’s answer was ”There’s more accumulated capital per worker in the American economy (where the U.S. janitor works) than in Nigeria’s economy (where the Nigerian janitor works). This is also the same reason why the American janitor of 2016 earns a higher wage than the American janitor of 1950 even though they’re no more productive.”

An answer like this is typical of Rick Kelo’s style- succinct, to-the-point and informative. He also tackled another pressing question, about the possible effects of reducing corporate tax rates, ”The answer to your question must be considered along three lines. The first line is the impact to the individual firm that now has a lower tax burden. The second line is the impact to the overall US economy, by which is meant the 60% of GDP comprised from the private sector. The third line is the impact on the US federal government in terms of tax receipts and the programs funded by those tax revenues.” For Rick Kelo, using his education to make important intellectual contributions to forums such as Quora, is an important duty of an educated American citizen.

Rick Kelo – What Is Happening With the Estate Tax?

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The Current Estate Tax Rules

Rick Kelo notes that the US Congress is considering a wide range of tax reform proposals currently. One of the many reform proposals deals with the US Estate Tax and its possible repeal. As per statistics, the Estate Tax in its current form has an impact on only 0.2% of all US estates.

According to the current legislation in place, an American citizen gets to enjoy a life-time exclusion amount of $5.5 at the moment. As a result, a married couple can leave behind $11 to their family and/or friends without the need for any Estate Tax. Of course, both of them need to be American citizens.

The effect of Estate Tax has been considered by Rick Kelo. As per the current law, any property that has been passed at death will get a step-up in terms of tax for determining the future capital gains that occur when the property has been sold.Rick Kelo

Illustrating the Effect

Consider an asset that has been purchased for $1,000. When this property is sold for $2,000, the taxpayer will have enjoyed a capital gain of $1,000. Now, if this asset was instead passed after the death of the taxpayer, the recipient’s tax basis will be increased to match the asset’s value at the date of the decedent’s death.

Continuing with the example, the first taxpayer will have bought the asset at $1,000. At his or her death, consider the value of the asset to be $1,500. The taxpayer who inherits the asset ends up selling the asset for $2,000. Now, for this taxpayer, the tax basis was increased to $1,500. As a result his or her capital gain after the sale is just $500.

 What Does the Repeal Bring?

The repeal of the estate tax can affect this transaction. Its repeal may actually cause the step up in the tax basis to be removed as well. Instead, it might be replaced by the carry over basis. In the case of the previous example, the taxpayer inheriting the asset will have a tax basis of $1,000 which was the original basis. As a result, the sale of the asset at $2,000 will bring a profit of $1,000.

While possibly welcome, Rick Kelo believes that repealing the Estate Tax might not actually be that much of a benefit. In fact, there is a chance that the repeal will lead to an increase in the taxes that must be paid than what is currently required.