SIGN UP FOR OUR For the estimated 70,000 American citizens living in Costa Rica, what will President Donald Trump’s new proposed federal tax cuts for the middle class and corporations mean to them?
Will U.S. tax cuts make any difference to the average retiree living on Social Security and perhaps a pension as a Costa Rican resident or perpetual tourist?
For these expat retirees, these new proposed tax cuts will make a minimal difference because their working days are over.
However, many expat retirees also have real estate investments, stocks and bonds portfolios, land holdings and other investments. For these, the Dow Jones Stock Market remains at record highs. If the pending corporate tax rates drop from 35-percent to 20-percent, look out and fasten your seat beat because the Dow will fly higher, and many American-owned businesses on foreign soil may choose to return home.
The U.S.’ corporate tax rate at 35-percent is one of the highest among industrialized, first-world nations. Dropping it to 20-percent would make the U.S. much more competitive in a global market.
President Trump unveiled his tax cut plan Wednesday in Indianapolis. Many details of the new tax cut plan have been left for the U.S. Congress to debate such as a cut in the capital gains tax which many investors want to see, along with a cut to the corporate tax rate.
For individuals, the plan would condense the number of tax brackets from seven to three with tax rates of 12-percent, 25-percent and 35-percent. Currently, the top rate is 39.6 percent while the lowest is 10-percent. If approve by the U.S. Congress the plan also increases the standard individual deduction to $12,000 and for married couples filing jointly it jumps to $24,000, according to Real Clear Politics.
“The biggest winners will be the everyday American workers as jobs start pouring into our country, as companies start competing for American labor and as wages start going up at levels you haven’t seen in many years,” the president said Wednesday.
President Trump’s proposed American Health Care Act of 2017 has been put on the back burner by three Republicans who oppose it, plus no Democrats were in favor of repealing and replacing the Obama-era Affordable Health Care Act. The president sees his tax cut plan as a major piece of legislation that could be passed by the end of 2017.
Meanwhile, in Costa Rica, two U.S. citizens expressed their feelings toward President Trump’s tax cut plan.
“Trump’s tax cuts would not help me at all,” said Beverly Black, a retired California native and property owner living 20-years-plus in Jacó Beach, Costa Rica. “But they would help my children in the states and grandchildren.”
Meanwhile, a long-time Jacó Beach resident and former banker expressed a different view.
“I have not yet heard about their plans to reduce the capital gains tax,” said Barry Linington, former CEO of Sovereign Bancorp Inc., a major investment firm in Philadelphia, Pa. “If it passes, Trump’s tax plan would help me overall.” Linington retired and moved to Costa Rica, where he is an expat property owner.
Capital gains taxes are among the details left for the U.S. Congress to hammer out as they debate these proposed tax cuts and the simplification of the overall complex and hard to understand Tax Code of the U.S. Internal Revenue Service.
Although the tax issue is somewhat boring, few subjects affect workers in the U.S. more in regards to the amount of income available to them after their individual taxes are paid. For decades, tax increases have shrunk the paychecks of Americans from coast to coast, just like rising costs of health care have.
Tax relief for millions of average middle-class Americans is long overdue. For those voters that put Trump into the presidency, they expect him to deliver on this campaign promise to the American people.
With three months left in 2017, the U.S. Congress must work with President Trump on these tax cats and not work against him. Failure to pass these tax cuts will result in more angry voters for next year’s mid-term elections. It was the angry voter that put Trump in the White House, and it will be the angry voter that keeps him in the White House while many in both houses of the U.S. Congress may be put out to pasture.
Click image to enlarge
Britt Nelson relocated to Costa Rica in 2011 from Florida, where he served as news editor for the Palatka Daily News, a newspaper owned by the New York Times Regional Newspaper Group (NYT-RNG) for 20 years.
Nelson served the NYT-RNG for 18 years in Tennessee, Kentucky, Virginia, North Carolina and Florida as a correspondent, reporter, staff writer, senior staff writer training new reporters, copy editor, page designer, editorial writer, editorial page editor and editorial board member
