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Trump’s tax plan would do little for the average American but a lot for the 1%
Source: The Guardian
Trump’s tax plan would do little for the average American but a lot for the 1%
Donald Trump’s three-bracket tax system looks appealingly simple,
but it would end up making the rich richer – and leave the rest of
America anything but great
Suzanne McGee
Sunday 24 July 2016 12.00 BST
If you were watching or listening to Donald Trump’s epic speech accepting the Republican party’s nomination for president, you couldn’t have missed the cheers that followed his statement that “America is one of the most highly taxed nations in the world.” The problem? It just isn’t true. And if Trump gets his way, it’ll be even less true for his 1% friends.
Trump may have been directing his words at some of those he needs to woo as donors, reassuring the country’s most affluent citizens that his proposal last year to levy higher taxes on the wealthy and to pursue fat-cat hedge fund managers was just so much hot air that he really didn’t mean any of it.
He also was over-simplifying the whole debate about corporate taxation, which is a tangled mess. While tax rates are high, the amounts that are collected are low; deductions and exclusions shrink the rate that’s payable, and companies end up holding large pools of cash offshore so that they don’t have to pay those high US tax rates. At last count, that cash mountain topped $2tn.
But that’s not what Trump said. He simply claimed that we are overtaxed. And while we may feel financially strained, the reason for it isn’t that we are paying more in taxes than in other industrialized nations. In fact, the Committee for a Responsible Federal Budget, a nonpartisan thinktank focusing on fiscal policy issues, rates his claims as demonstrably false.
[font size=1]-snip-[/font]
Trump’s written tax plan looks appealingly simple. He’d replace the current seven tax brackets with three – the bottom one would remain 10%, but the top one would fall from nearly 40% to 25% – a win for the wealthy. Taxes on dividends and capital gains would be capped at 20% – another big victory for the country’s richest citizens. Repealing the alternative minimum tax and the estate tax (which only kicks in if you’re leaving more than $5.4m to your heirs) also would help folks just like Trump and his wealthy friends and donor base. One thinktank calculated that the value of repealing the estate tax alone might be worth as much as $7.1bn to Trump’s own family (based on their estimation of his estate by 2030, and assuming that the 40% tax remains in place).
[font size=1]-snip-[/font]
Donald Trump’s three-bracket tax system looks appealingly simple,
but it would end up making the rich richer – and leave the rest of
America anything but great
Suzanne McGee
Sunday 24 July 2016 12.00 BST
If you were watching or listening to Donald Trump’s epic speech accepting the Republican party’s nomination for president, you couldn’t have missed the cheers that followed his statement that “America is one of the most highly taxed nations in the world.” The problem? It just isn’t true. And if Trump gets his way, it’ll be even less true for his 1% friends.
Trump may have been directing his words at some of those he needs to woo as donors, reassuring the country’s most affluent citizens that his proposal last year to levy higher taxes on the wealthy and to pursue fat-cat hedge fund managers was just so much hot air that he really didn’t mean any of it.
He also was over-simplifying the whole debate about corporate taxation, which is a tangled mess. While tax rates are high, the amounts that are collected are low; deductions and exclusions shrink the rate that’s payable, and companies end up holding large pools of cash offshore so that they don’t have to pay those high US tax rates. At last count, that cash mountain topped $2tn.
But that’s not what Trump said. He simply claimed that we are overtaxed. And while we may feel financially strained, the reason for it isn’t that we are paying more in taxes than in other industrialized nations. In fact, the Committee for a Responsible Federal Budget, a nonpartisan thinktank focusing on fiscal policy issues, rates his claims as demonstrably false.
[font size=1]-snip-[/font]
Trump’s written tax plan looks appealingly simple. He’d replace the current seven tax brackets with three – the bottom one would remain 10%, but the top one would fall from nearly 40% to 25% – a win for the wealthy. Taxes on dividends and capital gains would be capped at 20% – another big victory for the country’s richest citizens. Repealing the alternative minimum tax and the estate tax (which only kicks in if you’re leaving more than $5.4m to your heirs) also would help folks just like Trump and his wealthy friends and donor base. One thinktank calculated that the value of repealing the estate tax alone might be worth as much as $7.1bn to Trump’s own family (based on their estimation of his estate by 2030, and assuming that the 40% tax remains in place).
[font size=1]-snip-[/font]
Read more: https://www.theguardian.com/us-news/us-money-blog/2016/jul/24/trump-tax-plan-average-american-burden
