The following article by Rachel West, Katherine Gallagher Robbins and Melissa Boteach was posted on the Center for American Progress website October 16, 2017:
On the heels of their humiliating health care debacle, President Donald Trump and congressional Republicans are stepping up efforts to push a tax plan designed to benefit the wealthy. The plan makes vague and unspecific overtures when it comes to provisions that could benefit working- and middle-class taxpayers, but it is crystal clear about the benefits it would bestow on rich individuals and wealthy corporations.
For example, the plan removes taxes on extremely wealthy estates, slashes the top income tax rate from 39.6 percent to 35 percent, and abolishes the alternative minimum tax, which ensures that higher-income households—which are often able to take advantage of lucrative deductions and credits—contribute at least some modicum of taxes. It also gives a special low tax rate to owners of pass-through businesses, who are already able to avoid corporate taxes by instead paying personal tax rates on their portion of the businesses’ profits, allowing them a lower effective tax rate. All of these provisions would benefit the wealthiest Americans, including Trump himself.
According to analysis by the nonpartisan Tax Policy Center, under Trump’s plan, the average household in the bottom 99 percent would see its taxes decrease $343 in 2027, the final year of the conventional 10-year budget analysis. Meanwhile, the average household in the top 1 percent would see a tax cut of $207,060—more than 600 times larger. And while ultrawealthy households would reap huge benefits, by 2027, 1 in 4households would actually see their taxes increase under Trump’s plan.
New analysis by the Center for American Progress underscores the sacrifice that could be required in this trade-off. If the bottom 99 percent of households footed the bill for Trump’s tax breaks for the top 1 percent, it would cost each household an average of $1,370 more in 2027.*
This is because tax cuts don’t pay for themselves—especially cuts of this historic magnitude, which would reduce federal revenues by $2.4 trillion over 10 years. Financing Trump’s proposal would require deep cuts to critical benefits and services that all families rely on. And if past is precedent, the brunt of those trade-offs would fall on low- and middle-income families in the form of fewer shared public goods and services, the crippling of social programs that support basic living standards, and reduced investments in the productivity, health, and growth of the United States’ future economy and workforce.
For hardworking Americans, this raises a tough question: How would families pay the bills to cover Trump’s tax cuts for the uberwealthy? Would it be through funding cuts to children’s school financial aid? Reduced Medicare benefits for aging parents? Delayed repairs to the roads and bridges used to get to work every day?
Trump may have sold himself as a populist. But his tax plan is a double dose of tired trickle-down economics, delivered on a golden platter to millionaires and wealthy corporations to be paid for on the backs of average Americans.
* Methodology note: CAP’s estimates spread Trump’s total tax cut in 2027 for the top 1 percent of tax units equally across all tax units in the bottom 99 percent, based on analysis by the Tax Policy Center. Following this analysis, estimates are reported in nominal dollar terms.
Rachel West is an associate director for the Poverty to Prosperity Program at the Center for American Progress. Katherine Gallagher Robbins is the director of family policy for the Poverty to Prosperity Program at the Center. Melissa Boteach is the vice president for the Poverty to Prosperity Program at the Center.
View the post here.