Trump Tax Plan Departs From Past Promises
The tax plan supported by President Donald Trump would benefit wealthy Americans, a departure from Trump’s previous desires for tax reform.
“The people I care most about are the middle-income people in this country, who have gotten screwed,” Trump told The Wall Street Journal in July about his wishes for tax reform. “And if there’s upward revision it’s going to be on high-income people.”
The tax plans passed by the House and Senate, however, are estimated to benefit the wealthy the most.
The Congressional Budget Office found that Americans making less than $30,000 would face a bigger burden under the Senate tax plan, while people making between $100,000 and $200,000 would reap the most benefits.
And the Tax Policy Center found that by 2027 the top one percent of Americans will receive 62.1 percent of the tax cut. That same year, Americans in the 40 to 60 percentile will receive 2.8 percent of the tax cut.
Trump, however, continues to maintain that the Republican tax reform will hurt wealthy people like him and benefit middle class Americans.
The House and Senate bills would likely to hurt wealthy folk from Trump’s home state of New York due to it eliminating state and local tax deductions.
But other reforms sought by Congressional Republicans largely benefit the wealthy. Take the estate tax for example.
Trump and other Republicans have said ending the estate tax or “death tax” would help family farmers. But there aren’t many of these farmers, and they are also very wealthy.
A recent Des Moines Register report found that just around 5,000 taxpayers every year pay the estate tax. It is currently applied to assets above $5.5 million for individuals and $11 million for couples.
The House tax plan would eliminate the estate tax entirely in 2024 and the Senate bill would double the exemptions.
A Washington Post analysis found that historically “it is hard to find a tax plan that has done less for the middle class.”
Voters also agree with the Post analysis.
A recent CBS poll found that 69 percent of Americans think the Republican tax plan will benefit wealthy Americans, and 76 percent think it will help large corporations.
The tax plan includes permanent tax cuts for corporations and temporary ones for individuals, which Republicans hope to extend.
“Fundamentally, the bill has been mislabeled. From a truth-in-advertising standpoint, it would have been a lot simpler if we just acknowledged reality on this bill, which is it’s fundamentally a corporate tax reduction and restructuring bill, period,” Republican South Carolina Rep. Mark Sanford told the Post. “I think they were particularly concerned about innuendo and what that might mean, so it was labeled as a middle-class tax cut.”
To offset the $1 trillion the tax plan is estimated to add to the deficit, House Speaker Paul Ryan is now hoping to enact entitlement reform, which would also go against promises made by Trump during the campaign.
“You know, Paul [Ryan] wants to knock out Social Security, knock it down, way down. He wants to knock Medicare way down,” Trump said on local Wisconsin radio in March 2016. “I’m not going to cut it, and I’m not going to raise ages, and I’m not going to do all of the things that they want to do. But they want to really cut it, and they want to cut it very substantially, the Republicans, and I’m not going to do that.”