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How about that corporate income taxes accounted for another 7.6% of total revenue?
One of President Donald Trumps primary campaign stances was the plan to eliminate income taxes.
Here are five ways that income tax eliminationcould impact your investments.
Instead, you would have more money to contribute to investment accounts.
With more money to contribute, you couldmake more headway toward your financial goals.
Volatile Investments
Trumps main idea for replacing income tax revenue is imposing tariffs on other countries.
Tariffs established so farhave already wreaked havoc on the stock market.
When tariffs are announced, stocks fall.
And when Trump has paused certain tariffs, stocks soar.
This volatility is already making investors uneasy.
While domestic investments may stabilize in the long run, international investments could become more volatile.
Lower Barriers To Invest
Some people are hesitant to invest because of the tax implications.
Paying income tax on interest, dividends and capital gains can seem like a waste of money.
With no income tax, these deductions go away.
Employers would likely need to find alternative ways to offer benefits.
With income taxes removed, benefit packages may need to be reworked.
The Bottom Line
The elimination of income taxes could create both advantages and disadvantages for your investments.
Remember, both the Senate and the House need to agree to eliminate the income tax.
Only time will tell how this component of Trumps tax plan will take shape.
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