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Trump tax proposal could hike taxes for quarter of middle class, reliefs for top 1%

T

Tovarisc

Member
The White House has promised the biggest tax cut in the history of the country, and the promise of tax relief was a crucial aspect of Trump's pitch to voters as a candidate. Many Americans are probably expecting that Trump will bring down their taxes.

In fact, while Trump has not yet laid out a detailed plan, the proposals that administration officials have put forward so far would result in an increase in taxes for nearly one in five American households, according to an analysis published Wednesday by the nonpartisan Tax Policy Center (TPC).

And among those in the middle class, almost a quarter would see their taxes go up, according to the TPC analysis. For households with annual incomes between $49,000 and $86,000, those facing a hike would see an average annual increase of $1,000.

Among the other three-quarters of taxpayers in that range who would enjoy a tax cut, the average annual decrease of their household tax bill would be about $1,320, according to the TPC.
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Trump has promised to bring down taxes, dropping the rates on individual and corporate income, throwing out the estate tax and simplifying the system for ordinary taxpayers overall.

Yet in order to make up for some of the revenue that the federal government would forgo with reduced rates, his advisers have also proposed a few tax hikes as well -- mainly in the form of eliminating write-offs. The result is that while many households would pay less, some would pay more.

The benefits of the proposals from the Trump administration, however, are overwhelmingly concentrated among the very richest taxpayers.

Nearly half of the total savings (49 percent) would accrue to the richest 1 percent of households. Among the richest 0.1 percent -- the wealthiest one in 1,000 households, those with more than $3.4 million in annual income -- only 2 percent would pay more in taxes.

The other 98 percent would receive a tax cut, worth an average of nearly $1 million a year per household.
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Will the Trump tax cut 'pay for itself'?

The TPC analysis contradicts that claim. In the short term, reducing taxes would stimulate the economy, the authors predict. Over the long term, however, Trump's proposals would force the federal government to borrow more to make up the difference, and the tax cut would become a burden on the economy overall due to the additional federal debt.

Republicans could prevent that by reducing federal spending at the same time, although Trump has pledged not to reduce benefits for Medicare and Social Security, the entitlements that are the principle reasons for rising outlays.

Another option would be to reform the tax system in ways that encourage Americans to work and save, but finding enough alternative sources of revenue to avoid adding to the deficit, said Douglas Holtz-Eakin, a conservative economist and the former director of the Congressional Budget Office.
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Tax hikes for some

All these changes would mean less money for the federal government, and Trump and his advisers have talked about ways of raising revenue in other areas.

For instance, Trump's campaign proposed eliminating the special status for heads of household, which gives single parents a break on their taxes. Getting rid of it would result in a tax hike for many in the lower middle class.

Among more affluent households, some would pay more as a result of the proposal to end the personal exemption. A taxpayer would no longer be able to claim a break for each member of the household. And Trump's lieutenants have also discussed eliminating all of the individual deductions, with exceptions for writing down interest paid on mortgages and gifts to charity.

If those changes were implemented, they would most negatively affect Americans who are rich, but not quite rich enough. Nearly a third of households with incomes between $217,000 and $308,000 -- those in the 90th through 95th percentiles -- would pay more in taxes. The average annual hike for households in this group would be $3,900.
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Source: https://www.washingtonpost.com/news...r-of-the-middle-class/?utm_term=.7d9e0d4707eb

------

Trump’s tax cuts would give the poor $40 each and the ultrarich $940,000

The package, the TPC finds, would overwhelmingly help the wealthy. Including the tax hikes, the overall plan would give the average family earning under $25,000 per year a $40 tax cut, or a 0.3 percent boost in after-tax income. The top 0.1 percent, earning above $3.4 million a year, would get an average tax cut of $937,700, or a 13.3 percent boost in after-tax income
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The most costly elements, according to TPC, are the corporate rate cut ($2.3 trillion over 10 years), the individual rate cuts (also $2 trillion), and the new lower rate for pass-through income ($2 trillion). Pass-through companies — owner-operated businesses whose profits are taxed as individual income — are overwhelmingly owned by rich people, so cutting the top rate on income from them from 39.6 percent under current law to 15 percent under Trump’s plan is a huge, regressive, cut. It would also encourage tax evasion by spurring high-income people to stop earning wages from their employers and instead form pass-through businesses that their employers can pay instead, to take advantage of the new low rate.
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Usually, when challenged on the numbers for its tax proposals, the Trump administration has insisted that they’ll lead to large-scale economic growth, which can largely offset the cost. The TPC finds that this isn’t the case. The total plan, incorporating both revenue raisers and tax cuts, would cost $3.5 trillion over 10 years before taking economic growth into account, and $3.4 trillion after you take it into account. You only raise $108.9 billion from growth effects.

The revenue raisers also serve to make Trump’s plan even more regressive. If you just look at the tax cuts he's proposing, 60.9 percent of the benefits go to the top 1 percent of Americans. That's a pretty astonishing tilt toward the rich. But if you look at the combined effects of the cuts and the revenue raisers, 76.3 percent of the benefits go to the top 1 percent, and 94.8 percent go to the top 5 percent. Getting rid of head of household filing status and personal exemptions are tax increases that overwhelmingly hit middle-class people and don't hurt the rich much at all, especially since the personal exemption currently phases out for rich taxpayers.

“We emphasize that we are not analyzing the Trump administration’s tax plan: the released outline contains too many unknowns to do so,” TPC emphasizes. It had to fill in a lot of vague parts of Trump’s plan to produce numbers. But the report does indicate that the Trump plan will likely be very regressive, and very expensive.
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Source: https://www.vox.com/policy-and-politics/2017/7/12/15959210/trump-tax-cuts-reform-tax-policy-center
 
G

GK86

Homeland Security Fail
The rich need another mansion to buy, guys. They can't only live in three mansions. That is basically poverty.
 
WaterAstro

WaterAstro

Member
Tax the poor. Tax relief for the rich.

Man, if he said that during his campaign, he wouldn't even get a single state.
 
T

The Jackdog

Member
can they even afford to pass this if they cant repeal obamacare?

i dont mean afford as in political clout. i mean, literally can we afford the cuts
 
SolidSnakeUS

SolidSnakeUS

Member
Don't worry, people who are hardline Republicans yet get nailed by this tax increase for them just so the rich get less taxes are still going to vote against their own self interest. I think we should define this shit as "mental masochism".
 
K

~Kinggi~

Banned
" For households with annual incomes between $49,000 and $86,000, those facing a hike would see an average annual increase of $1,000."

hehe, heh, heh, you fucking stupid pieces of shit die in a fire, hehe, heh
 
J

jWILL253

Banned
Redistribution of wealth. Except, instead of having the rich pay their fair share, just go ahead and rob everyone else blind.
 
N

Nirolak

Mrgrgr
Autodidact said:
And they said he wouldn't be a typical Republican president!
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I'm not sure even normal Republicans would try to pass this.

They'd normally like give the middle class a $1000 cut to help hide lining their own pockets instead of raising taxes on them.
 
R

RoKKeR

Member
Increase on the middle class, lol.

This isn't even a Republican-esque plan. It's completely transparent. Idiots.
 
T

TangoAlphaLima

Member
Nirolak said:
I'm not sure even normal Republicans would try to pass this.

They'd normally like give the middle class a $1000 cut to help hide lining their own pockets instead of raising taxes on them.
Click to expand...

That's what the Bush tax cuts did. Everyone got some amount of relief, but the rich got by far the biggest relief. It's generally enough to satisfy the stupid and naive.
 
A

Atomic Playboy

Member
In fact, while Trump has not yet laid out a detailed plan, the proposals that administration officials have put forward so far would result in an increase in taxes for nearly one in five American households, according to an analysis published Wednesday by the nonpartisan Tax Policy Center (TPC).

And among those in the middle class, almost a quarter would see their taxes go up, according to the TPC analysis. For households with annual incomes between $49,000 and $86,000, those facing a hike would see an average annual increase of $1,000.
Click to expand...

I think it's important to remember that there is no detailed plan yet. Because there is no way you get the majority of Republicans in Congress on board with a plan that raises taxes on blue collar workers by $1,000+ annually. Can you imagine the attack ads for Congressmen who vote for a $1,000 tax increase on their constituents? No one is risking their re-election chances on that. We'll probably end up with something similar to what Bush did; small tax breaks for the poor and middle class, massive tax breaks for the rich, and cuts to programs that benefit poor people.
 
E

Electric Eye

Banned
UGH. And of course all the dumb bumpkins that vote republican wont be the ones affected so many are so dumb and poor they'll never be middle class yet rail against people taking "handouts" when their stupid red states are the true leeches on the rest of us.
 
H

Host Samurai

Member
I wouldn't have expected anything less. Dude will pay like no taxes on all the money he's collected when he golfs at Mar-a-Lago. Hopefully people will revolt in the town halls like they did on healthcare.
 
C

chuckddd

Fear of a GAF Planet
Fry-Im-Shocked-Futurama.gif
 
T

Tovarisc

Member
S

Stinkles

Clothed, sober, cooperative
You know, if you could magically erase tribalism from working class folks' memories, and let them all look at the actual policies without that filter, literally every rational voter would just laugh at this proposal. But thirty years of really intensive Team affiliation have warped the electorate's ability to simply look at facts.

Fact: This tax cut will be a disaster for the economy and provide zero benefit and lots of hardship to the poor, middle class and most rich people too (as the general economy is undermined by it).

Reality: My team chose it/opposed it.
 
G

greepoman

Member
At this point I expect if this passes the GOP will just lie and say those people are getting tax cuts and their base will believe them even if their taxes go higher. I mean are you gonna believe some socialist who tells you to just look at your taxes...it's obviously a trick.
 
R

Rebel Leader

THE POWER OF BUTTERSCOTCH BOTTOMS
The TPC analysis contradicts that claim. In the short term, reducing taxes would stimulate the economy, the authors predict. Over the long term, however, Trump's proposals would force the federal government to borrow more to make up the difference, and the tax cut would become a burden on the economy overall due to the additional federal debt.
Click to expand...


giphy.gif
 
F

Flo_Evans

Member
No way in hell they kill the personal exemption. Bible thumpers with a quiver full of kids that don't believe in birth control or abortion love that shit.
 
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