Taxes and death are the two eternal themes that Americans face throughout their lives. While death remains unchanged, taxation is about to undergo a massive transformation! The details of President Trump's tax reform were officially announced on the afternoon of the 26th, including key points such as tax cuts for the middle class, repeal of the "estate tax," the Affordable Care Act tax, and deductions for childcare expenses. A stone creates a thousand waves, shaking the global economy!
1. The reform of individual tax rates simplifies the current seven brackets to three brackets. These three brackets are: 10%, 25%, and 35%. The three highest rates among the original seven were: 28%, 33%, and 39.6%.
2. The proposed new tax law increases the standard deduction for a family of four from $12,000 to $24,000, meaning that couples filing jointly will have $24,000 that is tax-free.
3. The corporate tax is reduced to 15%.
4. The individual tax burdens that are eliminated include: estate tax (also known as "death tax"), Affordable Care Act tax, and Alternative Minimum Tax (AMT).
5. Two deductions are preserved: Mortgage Interest and charitable contributions; all other deductible items have been eliminated to avoid past tax loopholes.
6. A shift to a "territorial tax" system. Companies will not pay taxes on earnings generated overseas; the currently "hidden" corporate earnings in foreign countries will incur a one-time corporate tax.
In 2017, China will implement the Common Reporting Standard (CRS), but the United States, as a primary "capital-raising powerhouse," has not joined the CRS. Coupled with Trump's significant tax cuts, advocacy for the repeal of the estate tax, and lenient tax policies, the United States has become a new emerging "tax haven." For high-net-worth individuals, investing in the United States in 2017 is an excellent opportunity to avoid the depreciation of the Renminbi and to achieve reasonable personal wealth planning.
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