Trump’s tax plan: massive cuts for the 1% will usher ‘era of dynastic wealth’

Gentle Reader – It is this setup for the next 4 years – a tax cut that removes somewhere between 5 and 9 trillion dollars from the Federal Treasury, most going to the wealthiest 1% – that sets the stage for cuts in Medicare, Medicaid, educational assistance, Social Security (?), everything.  A renewed or revised Accountable Care Act ? Forget it, you 20-million who were helped by the attempt – this first step – at a national health care scheme. We will be lucky to have anything except the dried husks of empty promises.
And the tax-cuts of this charlatan will result in a TAX INCREASE for the the unsung heroes of our country: low-income and single parent families.
Cuts to everything, that is, except for our bloated military. A military that this President-elect will use to our detriment when his economic plans and promises are ship-wrecked on the reefs of reality. At that point, he and his cabal of criminals will be in search of an enemy to make war upon. 
The most likely victims are middle- and low-income families.
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Expert warn that more than eight million low-income and single-parent families will face sharp tax increases under Donald Trump, exacerbating income inequality.

Under Donald Trump’s proposed tax plan, the most wealthy Americans will receive an average annual tax cut of $215,000.

trump
Photograph: Peter Foley/EPA

Experts warn that Trump’s tax plan will exacerbate America’s already chronic income inequality and herald in a “new era of dynastic wealth”.

https://interactive.guim.co.uk/embed/2016/11/trump-tax-richest/

“The Trump tax plan is heavily, heavily, skewed to the most wealthy, who will receive huge savings,” said Lily Batchelder, a law professor and tax expert at New York University. “At the same time, millions of low-income families – particularly single-parent households – will face an increase.”

Batchelder, who wrote an academic paper on Trump’s tax plan published by the Urban-Brookings Tax Policy Center, said that the president-elect’s plan “significantly raises taxes” for at least 8.5 million families, with “especially large tax increases for working single parents”. More than 26m individuals live in those families.

According to Batchelder’s research Trump’s tax changes – taken at their “most conservative” – could leave just over half of America’s nearly 11m single-parent households facing an increased tax burden. This figure rises to 61% – or 7m households – if the analysis is run on “reasonable assumptions” that the changes Trump has suggested go ahead.

Single-parent families would suffer the most because Trump would lower the minimum of tax-free earnings to $15,000 per adult no matter how many children in the household. Under current law the threshold is $17,400 for single-parent families with one child and $24,750 for a couple with one child, and the threshold increases by $4,050 for each additional child.

Trump also plans to consolidate the current seven tax brackets into three: 12%, 25% and 33%. His plan would scrap the current 10% tax for earnings under $19,625 and replace it with 12%. Trump’s proposed childcare credits would not make up for the changes, according to Batchelder.
https://interactive.guim.co.uk/embed/2016/11/trump-tax-families/

Minority families are set to suffer disproportionately from the tax increases, according to Batchelder. With 32% of African American families facing a tax increase compared with 19% of whites, this is mostly due to African American families being more likely to share the burden of childcare within the family and hence not benefit as much from Trump childcare credits. Batchelder said the effective tax increase for many millions of families would run into the thousands.

While the poor will face tax increases, the Tax Policy Center research said the rich would received big tax cuts that get even bigger as you work up the income scale. The top 20% of earners would receive an average annual tax cut of $16,660 compared with an overall average cut of $2,940.

The richest 1% will collect 47% of all the tax cuts – an average saving of $214,000.

The 0.1% – the 117,000 households with incomes of more than $3.7m – would receive an average 2017 tax cut of $1.3m, a nearly 19% drop in tax they were due to pay in 2016. The tax savings of the super-rich will increase further in future, with the 0.1%’s estimated 2025 tax bill to fall by $1.5m.

It is a stark contrast to Hillary Clinton’s tax plan, which would have seen taxes rises for the super-wealthy. Under her plan, the top 1% would pay an extra $163,000 a year more on average, and would have made up 93% of all new tax revenue by 2025.

“Listening to Trump’s rhetoric, most Americans probably don’t realise at all the impact of Trump’s tax plan,” Matt Gardner, a senior fellow at the Institute on Taxation and Economic Policy (ITEP) said. “Any way you slice it, the very best-off Americans will be the biggest beneficiaries.

“If it looks bad now for middle-income families, those who turned out to vote for him, it’s only likely to get worse [with Trump as president]. It is very likely that they will end up poorer still. The most likely victims are middle- and low-income families.”

Gardner said that under Trump, America will become even more divided between the rich and poor. “America is already very unequal, and his proposals would make income inequality a lot worse,” Gardner said. “This is obviously quite worrisome. If he rode to victory on a middle-income wave of support, those middle Americans will be very disappointed.”

https://interactive.guim.co.uk/embed/2016/11/trump-tax-change/

The inequality problem will be exacerbated by Trump’s plan to scrap inheritance tax – which he refers to as “the death tax”. The 40% inheritance tax is currently only charged on personal estate worth more than $5.45m and joint estates of $10.9m – sums so large that it only affects less than two in 1,000 Americans.

Trump has proposed repealing the tax entirely. While Clinton, pushed by Bernie Sanders’ strong stance on the issue, had suggested lowering the threshold to $3.5m and increasing the rate to 65% for the super-wealthy.

“It’s hard to think of a tax change that will have a more detrimental effect on inequality,” Garnder said. “There is no question that this will lead to a perpetual income elite – hardly the thing that Trump voters would have wanted. This will lead to a new era of dynastic wealth.”

This article was amended on 24 November 2016. An earlier version referred to “tax breaks” where “tax brackets” was meant.

 

 

https://www.theguardian.com/us-news/2016/nov/23/trump-tax-plan-cuts-wealthy-low-income-inequality?utm_source=esp&utm_medium=Email&utm_campaign=GU+Today+USA+-+morning+briefing+2016&utm_term=201120&subid=9095434&CMP=ema_a-morning-briefing_b-morning-briefing_c-US_d-1

About AJ Layon

AJ Layon was, for 28 years, at the University of Florida College of Medicine, in the Division of Critical Care Medicine, in Gainesville, FL. For the past approximately 10 years, until September 2011, he was Professor and Chief of Critical Care Medicine at UF; In September of 2011 he became System Director of Critical Care Medicine in PA. While his interests are primarily related to health care, health care reform, and ethical issues, as a citizen of our United States and our world, he will occasionally opine on issues of our "time and destiny". You are welcome to respond to him at ajlayon@gmail.com.
Gallery | This entry was posted in Accountability, Grossly Unacceptable Excuses, Health Care Reform, History and tagged , , , , , , , , , , . Bookmark the permalink.

One Response to Trump’s tax plan: massive cuts for the 1% will usher ‘era of dynastic wealth’

  1. Pingback: Healthcare Under Trump | Notes from the Southern Heartland

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