Trump’s is a Tax Plan for the Wealthy
by Jessica Schieder, 10/8/2015
The recently released details of presidential candidate Donald Trump’s anticipated tax plan provide insight into the real estate mogul’s vision for the tax code—a vision in which the wealthiest Americans receive massive tax giveaways.
While many details have yet to be disclosed, Trump’s ambitions are clear. Based on the details available, the plan would reduce national revenue by more than $10 trillion over the course of the next decade, largely by giving tax breaks to the wealthiest Americans, according to Citizens for Tax Justice.
As the chart below illustrates, the benefits would disproportionately benefit the wealthy. The wealthiest twenty percent of Americans would receive 68 percent of the benefits. A third of all the tax breaks given will benefit the wealthiest 1 percent, further increasing inequality.
The Trump plan provides tax relief where it’s needed least.
While his plan would reduce taxes, it would reduce taxes most on the wealthiest Americans. The poorest fifth of the population—those with an average income of $15,600 annually—would see their taxes reduced by a modest $250 or $5 a week. The average one-percenter—folks who on average earn $1,790,000 annually— would save an average of $184,268 on their tax bills.
In a country where the basic needs of many working people aren’t being met, giving huge tax breaks to the wealthy instead of funding the public institutions that create opportunities and stability for the middle class is is irresponsible, unfair and reckless.
The plan provides no support for those who need it most.
Trump’s decision to provide such an outsized giveaway to the wealthiest Americans appears even more unfair in the context of the economic recovery from the Great Recession. In the wake of the Great Recession, the all income gains have gone to the wealthiest one percent of Americans. The long-term unemployed continue to account for almost 28 percent of the unemployed— record numbers that suggest Americans are still getting locked out of the workforce.
The unequal recovery, coupled with decades of wage stagnation, has left working Americans ill-prepared to weather future economic and financial bumps. Forty seven percent of respondents in an annual survey by the Federal Reserve report they would be unable to cover a $400 emergency expense without selling something or borrowing money. This tax break wouldn’t provide even that much for the neediest Americans.
Massive tax giveaways come at a cost.
Trump’s plan would deprive the federal government of more than $10 trillion in revenues that could otherwise be used to invest in education, environmental protection, and infrastructure.
The deficit has already been cut by more than half since 2009. But sequestration continues to set domestic spending (non-defense discretionary) on a course to hit historic lows as a share of GDP. This means we’re investing less in education, nutrition, environmental protection, and housing.
Trump’s tax cuts would translate into even more pressure on programs that Americans care about – like healthcare for veterans, help for states, and infrastructure investments. So tax breaks to the wealthiest Americans will be paid for by reducing funds for services that working people depend on to get ahead—schools, nutrition, and infrastructure programs that create jobs.
Tax cuts for the wealthy are not the answer.
Working people face a barrage of anxieties in today’s economy—the rising cost of higher education, stagnating wages, and worries about retirement security, among others. Those with more should pay their fair share to encourage more shared prosperity. Tax cuts for the wealthiest Americans rob government of needed funding to invest in public goods and robs working families of the supports they need for a more secure life.
For Future Reading:
New Research Finds Excessive Stock Option Compensation Leads CEOs to Ignore Product Safety Problems, The Fine Print, 10/8/2015
CEG's Scott Klinger on Los Angeles Public Radio, The Fine Print, 8/25/2015
$248 a Minute? CEO Pay is Sky-high at America's Low-wage Employers, The Fine Print, 7/2/2015