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Carolyn Kaster / AP

The proposed changes in President Trump's tax plan, and resulting impacts on individuals and corporations:

Change: No deducting state and local taxes from federal returns.

Impact: The average individual in high-tax states like Connecticut, California and New York would pay an additional $19,000 in taxes according to the Tax Policy Center. One-third of Americans usually benefit from these deductions, and the change could see home values drop according to the National Association of Realtors.

Change: Nixing deductions except for mortgage interest and charitable contributions.

Impact: Deductions could be cut for healthcare premium payments, student loans, contributions to individual retirement accounts, alimony payments, student loans, and disability insurance. (Tax relief for childcare costs is mentioned but not detailed). Contractors and those self-employed could lose the deductions that lower their taxable income and help them run their businesses.

Change: Doubling the standard deduction

Impact: This would lower taxable income, though the impact depends on each individual's specific situation and what bracket they fall into.

Change: Cutting the top tax rates

Impact: The wealthiest individuals would see their tax rate drop from 39.6% to 35%. Pass-through corporations, people in real estate, or money managers could see their rates reduced from up to 39.6% to 15%.

Change: Eliminating the estate tax and alternative minimum tax (AMT)

Impact: Eliminating the so-called "death tax" will remove taxes that are levied upon transferring estates worth over $5.49 million. Eliminating the AMT will allow individuals to take standard deductions they are normally not eligible to take, though it's unclear if doubling the standard deduction would still translate to cuts for those individuals.

Other changes
  • Businesses would owe little or no tax on future foreign profits.
  • Shareholders of Master-Limited Partnerships, often associated with oil-and-gas companies, will also get a reduction in their taxes, per the WSJ.
  • Tech companies are pleased with Trump's proposal to shift the U.S. to be a "territorial tax system," which only taxes domestic earnings. That will decrease the amount of taxes many tech companies owe each year.

Go deeper

Trump gives farewell address: "We did what we came here to do"

Photo: Mandel Ngan/AFP via Getty Images

President Trump will give a farewell video address on Tuesday, saying that his administration "did what we came here to do – and so much more."

Why it matters, via Axios' Alayna Treene: The address is very different from the Trump we've seen in his final weeks as president — one who has been refusing to accept his loss, who peddled conspiracy theories that fueled the attack on the Capitol, and who is boycotting his successor's inauguration. 

Dave Lawler, author of World
14 mins ago - World

Europeans have high hopes for Joe Biden

Data: Pew Research Center; Chart: Andrew Witherspoon/Axios

Joe Biden's inauguration will be greeted with enthusiasm in Europe, with three new polls making clear that most Europeans can't wait to bid Donald Trump adieu.

The big picture: Europeans generally expect brighter days ahead under Biden, according to the polls, but his election has not fully assuaged doubts about U.S. democracy and global leadership.

52 mins ago - Health

U.S. surpasses 400,000 coronavirus deaths on Trump's final full day in office

Expand chart
Data: CSSE Johns Hopkins University; Chart: Andrew Witherspoon/Axios

Over 400,000 people have died from the coronavirus in the U.S. as of Tuesday, per Johns Hopkins data.

Why it matters: It only took a little over a month for the U.S. to reach this mass casualty after 300,000 COVID deaths were reported last month. That's over 100,000 fatalities in 36 days.