Meanwhile, some economists expressed concerns that the changes may add trillions of dollars to the US deficit over the next decade. Radio Sputnik discussed the issue with Mr. Alan Cole, an economist with the Center for Federal Tax Policy at the Tax Foundation NGO.
"I still see this as a very rough draft. The legislative process for taxes is very long. But I do see the makings of the tax reform, eliminating at least one major deduction and enhancing the lower rates," the expert said.
According to Cole, in particular the deduction for state and local taxes is expected to be eliminated.
"The US has different levels of state and local taxes depending on what area of the country one is in. For example, New York City has much higher taxes than Houston does. So these taxes are deductible at the federal level under current law. But this plan would remove it. So, even if the plan generally cuts taxes for most people, I could see it having a different effect, depending on which region you live in," Cole stated, adding however that "as these reforms look now, they will definitely increase the federal debt," the expert noted.
The reforms are also supposed to double the standard deduction Americans are able to claim on their tax returns.
