In most cases, it’s best practice to cut through the media noise and go straight to the source to understand what’s happening in public policy. Donald Trump’s tax plan is not one of those cases.
The president is crisscrossing the country giving speeches to crowds about his plan to cut taxes on the very wealthy. Of course, he’s not using those words, but that’s what his plan will do.
If you want to understand what’s in Trump’s latest tax plan, skip the bluster and look straight at the numbers.
Three figures in particular shed a light on the actual impact of the plan.
80%.
Trump’s tax plan is essentially a collection of tax cuts for individuals and businesses. Of the cuts on the individual side, 80% of them will go to the wealthiest 1%, according to the nonpartisan Tax Policy Center.
When Trump says he’s out to help the middle class and not the rich, his words are directly countering the actual impact of the plan. This could be because he doesn’t understand his own plan — a valid possibility.
More likely, though, it’s because he’s lying through his bleached teeth.
0.2%.
Trump’s tax plan would repeal the federal estate tax, also known as the inheritance tax.
This often misunderstood portion of the tax code is a levy on the inter-generational transfer of immense wealth, and by immense I mean more than $11 million. Only the wealthiest 0.2% of households will ever pay the tax, an exclusive group of multi-millionaires and billionaires.
Trump and others would like you to believe the estate tax is levied on the $10,000 your grandmother left you, or the $400,000 house your parents want to pass down. Again, not the case.
Don’t get it twisted: The estate tax only impacts the extremely wealthy, and eliminating it benefits only them.
15%.
Trump often says he’d like to see the corporate tax rate drop to 15%, down from its current statutory rate of 35%. Cutting the rate by more than half is going to usher in a jobs boom like we’ve never seen before, he rants.
Nuh-uh.
First off, the plan overall would cost a whopping $1.5 trillion over 10 years. That alone is enough to pay more than 18 million elementary school teachers to improve our education system over the same period of time. (Maybe then we’d know the basic arithmetic that our president chooses to overlook.)
Second, it could lead to a dramatic drop in jobs.
A recent report from the Institute for Policy Studies looked at profitable companies who, thanks to loopholes, paid an effective tax rate of 20% or less. Those companies, on average, cut their workforce even while the rest of the private sector saw a 6% jobs increase.
Cutting taxes doesn’t create jobs, the report concluded. It does, however, contribute to higher and higher CEO pay. Just what we need!
The Trump tax plan is a giveaway to the ultra-wealthy, and selling it as anything other than that is a misrepresentation of the facts. Don’t take my word for it — look at the numbers!
Josh Hoxie directs the Project on Taxation and Opportunity at the Institute for Policy Studies. Distributed by OtherWords.org.
From The Progressive Populist, November 15, 2017
Blog | Current Issue | Back Issues | Essays | Links
About the Progressive Populist | How to Subscribe | How to Contact Us
PO Box 819, Manchaca TX 78652