Trump Tax Code Reform Favors the Rich and Big Corporations – Surprised?
- Business, Economics, Government, News, Policy
- economics, redistribution of wealth, tax reform, trump tax plan
- October 4, 2017
From seven brackets to three
The White House and Congressional Republicans announced their plans for a tax code reform bill. There is a bit of something positive in it. It would simplify the tax code into three brackets, instead of the current seven. But that’s about all that is positive in it for the middle class.
“We’re going to cut taxes for the middle class, make the tax code simpler and more fair for everyday Americans,” Trump said while speaking about the plan. “We are going to bring back the jobs and wealth that have left our country — and most people thought left our country for good.”
The plan would raise the bottom rate to 12 percent from today’s 10 percent. According to the blueprint of the plan, average families “are expected to be better off” under all the changes it proposes. An analysis by the Americans for Tax Fairness found that the plan would provide a “modest middle-class tax cut,” mainly by doubling the standard deduction. However, the analysis also found that if the tax plan repeals the personal exemption and the head of household filing status, “much of that could be taken away.”
The tax reform plan could total $6.7 to $8.3 trillion, and $3 to $5 trillion of it may end up not being paid for by limiting tax deductions or closing other tax loopholes, according to the Americans for Tax Fairness. The funding deficit would threaten funding of services such as Social Security, Medicare, Medicaid, and public education.
President’s Trump’s budget for 2018 proposed $4.3 trillion in cuts to Social Security, Medicaid, public education and other non-defense programs. The House budget proposed $5.8 million in cuts to Medicare, Medicaid, public education and other non-defense programs.
“The idea that this plan would help average Americans instead of the wealthy and big corporations has been a hoax all along,” said Frank Clemente, executive director, Americans for Tax Fairness.
“This plan will not lead to robust job creation or economic growth, but its eye-popping cost will lead to deep cuts in Social Security, Medicaid, Medicare, and public education that will leave working families in the cold.”
A “thinly veiled giveaway”
Democrats are opposed to the Republican tax reform plan. The Democratic Party’s website calls it “nothing more than a thinly-veiled giveaway to big corporations and the one percent.” And the party’s website pointed out that Trump had Steven Mnuchin and Gary Cohn, former Wall Street executives, create a tax plan “out of the public eye that would be a massive windfall to Trump and his wealthy corporate buddies.”
Senate Minority Leader Chuck Schumer (D-NY) blasted the Republican’s tax reform plan. “It seems that President Trump and Republicans have designed their plan to be cheered in the country clubs and the corporate boardrooms,” he said on the Senate floor, the Hill reported. “[Republicans are] going to be in for a rude awakening as the American people are going to rise up against this,” he added.
The rich get richer
Three polls conducted this month indicate that Schumer just may be right. An NBC/WSJ poll found that 42 percent of those polled said Congress should not cut taxes right now, and 62 percent said taxes for the wealthy should be increased. A Washington Post/ABC poll found that 51 percent believe that Trump’s tax plan will disproportionately benefit wealthy Americans. And a Politico/Morning Consult poll found that 60 percent think that corporations do not pay enough taxes.
Perhaps the Independent Senator from Vermont, Bernie Sanders, summed up the opposition to the tax plan the best:
“At a time of massive wealth and income inequality, President Trump’s tax plan is morally repugnant and bad economic policy,” he said.
Indeed, it is.