When President Donald Trump took the stage Wednesday at the Indiana State Fairgrounds, he called the simultaneously released Republican tax overhaul proposal a “middle class miracle.”
But, even the most cursory glance at what details have been outlined reveals it to be anything but miraculous for those who aren’t already wealthy.
The first figure to consider is the cost of the plan as it relates to the already skyrocketing national debt. According to Goldman Sachs, the projected cost over the next 10 years would be $4 trillion. For comparison, the Bureau of Economic Analysis calculated the national debt at $14.3 trillion, or 76 percent of Gross Domestic Product, as of Election Day 2016. This scheme, such as it, would only cause these figures to rise even faster.
The next point to ponder would be exactly how much this plan would benefit Trump personally. We simply can’t know the exact figure. And, not just because the details of the plan itself are spare, but because the president has stubbornly refused to release his tax returns. What we do know would spell a huge windfall for him, and especially, his heirs.
Thursday, The New York Times’ Jesse Drucker and Nadja Popovich used a partial 2005 tax return furnished in March by Trump biographer David Cay Johnston and Bloomberg Billionaires Index’s estimation of $2.86 billion in assets to calculate a total possible savings of $1.1 billion. Most of this would be taken up by a $1 billion benefit to Ivanka, Eric, Tiffany, Barron and Donald Trump Jr. by the plan’s removal of the estate tax.
The rest of the plan’s finer points amount to a reheated version of trickle-down economics sprinkled with an extra dash of sadism for the poor, especially in blue states.
The plan doesn’t specify what the specific income thresholds would be, but, as it stands, the current tax rate for top earners is 39.6 percent. This plan would drop that to 35 percent. The alternative minimum tax, which was created a half-century ago to ensure the wealthy paid at least some taxes, would be gone. Pass-through businesses would see a tax cut; same for corporations.
As for the working class, the plan would increase the standard deduction, but it would eliminate the personal exemption. The state and local tax deduction would be gone, as well. (As The New York Times’ Alicia Parlapiano pointed out Wednesday this would hit taxpayers in states won by Democratic presidential nominee Hillary Clinton disproportionately hard. We’re sure it’s just a coincidence, though.) Oh yeah, and the tax rate for the lowest earners would go from 10 percent to 12 percent.
The middle class needs a miracle all right, but this isn’t it.
© 2024 Community Newspaper Holdings, Inc.