Donald Trump’s tax plan, and I’m using the word plan pretty liberally here, is an incredibly vague part of his agenda currently. Assuming he doesn’t have the brain power to make it more clear or surround himself with people that could do it for him, the best that one research group could tell it means tax breaks of nearly $1,000,000 for the ultra-wealthy and somewhere around $40 for the poor. Yes, $1,000,000 and $40.
A new analysis by the Tax Policy Center finds that the tax cuts included in the Trump administration’s outline for tax reform released in April could cut federal revenues by as much as $7.8 trillion over 10 years, and that the benefits would go almost exclusively to the top 5 percent of earners.
Even if the plan included some very large tax hikes to offset the cuts (like doing away with personal exemptions and other common deductions) and taking into account effect on economic growth, the cost still comes to $3.4 trillion over 10 years. The cost would be even greater once you take into account the interest the US would have to pay on all that debt. For context, a $3.4 trillion tax cut would amount to about 12 percent of GDP in 2027, slightly larger than all the tax cuts George W. Bush passed while in office.
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:
“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.”
Very Regressive, and Very Expensive: Donald Trump’s America will make a great history book someday.