Trump Says His Tax Plan Wouldn’t Benefit the Rich, But Numbers Tell a Different Story
Associate Editor, ThinkProgress
Speaking with reporters on Thursday, President Trump repeatedly deflected questions about whether his tax reform plan would benefit the wealthy, instead selling his proposal as a tax cut for middle-income earners.
“The wealthy Americans are not my priority. My priority are people in the middle class and that’s where we’re giving the big tax reduction to,” Trump said. “It’s about the middle class and it’s about jobs and bringing jobs back to the country… Right now we’re paying the highest tax rate in the world. We want to bring that to around 15 percent, [because] that would make us competitive with China and other countries… Just so you understand, my priority is jobs… and the middle class, taking care of those.”
Trump’s one-page proposal, which the White House rolled out in April, not only aims to reduce the corporate tax rate from 35 percent to 15, it also cuts the top rate on individual income from 39.6 percent to 35 percent. A 3.8 percent income tax for couples earning over $250,000 a year would also be slashed.
When a reporter noted on Thursday that Trump’s plan to reduce the individual rate would naturally bring down taxes for the wealthy, Trump dodged.
“What’s going to happen is… the individual rate coming down will be substantial for the middle class,” Trump responded, after a pause.
Trump may sell his tax reform proposal as a cut for middle income-earners, but analysis has shown that it would indeed benefit the rich considerably.
According to the Center on Budget and Policy Priorities (CBPP), a progressive think tank based in Washington, D.C., the policy outline that the White House released back in April would not only give the top 1 percent of earners a cut averaging “at least $250,000” per year, it would also gift the country’s 400 highest-income taxpayers with over $15 million in cuts annually. CBPP estimated, based on IRS data, that “the total tax cut for these 400 households would be at least $6 billion annually.”
“The Trump plan prioritizes these tax cuts for the highest-income Americans over many worthy programs that need more resources,” tax policy fellow Brandon DeBot wrote in May. “For example, $6 billion is more than the federal government spends on grants for major job training programs to assist people struggling in today’s economy. …Also, $6 billion is roughly the cost of providing 600,000 low-income families with housing vouchers that would help them afford decent, stable housing.”
Those numbers haven’t stopped the president from selling his proposal as a life raft for the middle class.
“The rich will not be gaining at all with this plan,” Trump told reporters ahead of a bipartisan meeting with House members on Wednesday, according to Politico. Instead, his plan, if enacted, would be the “largest tax decrease in the history of our country for the middle class”, he claimed.
“…Policymakers eventually would likely pay for the large tax cuts for the very wealthy at least in part by cutting programs on which they and millions of other low- and middle-income families rely,” DeBot explained back in May.
Of course, all of those concerns could be moot, should the president once again flip flop on the issue.
In a confusing afterthought on Wednesday, when asked whether he would consider raising taxes for top income-earners to truly give the middle class a break as he has proposed, Trump added, “I think the wealthy will be pretty much where they are. If they have to go higher, they’ll go higher, frankly.”
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Reposted from ThinkProgress
