Trump released his official proposal Wednesday, and two things immediately stand out: the hypocrisy of Republican budget hawks and the questionable ethics that have surrounded Trump's administration since before he was elected.
The top individual income-tax rate is now 39.6 percent, though Trump's plan would cut that to 35 percent. While that will unquestionably help businesses across the country, it also will create a huge reduction in government revenue. But the only people who will clearly benefit from the plan are people like Trump.
In its editorial titled "President Trump's Laughable Plan to Cut His Own Taxes", The NYT claims the tax plan was created exclusively to benefit Trump and other rich captains of industry. Numerous remaining 30% who itemize, largely higher income households, would likely switch to the standard reduction, leaving only about 5% itemizing, he says.
"The president consolidates the current seven into three tax brackets, and this is about simplification for individuals", Michel continues. Unfortunately, wonder is all we can do.
President Trump's new tax plan proposes some dramatic changes.
The outlined changes to the tax code are the most concrete guidance so far on Trump's vision for spurring job growth. But all other deductions, except for mortgage interest and charitable contributions, would be eliminated, including state and local taxes and medical expenses.
That is, of course, the premise of the Laffer Curve, brainchild of Arthur Laffer, father of supply-side economics, who convinced President Reagan of the wisdom of massive tax cuts more than a generation ago.
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The United States has one of the highest corporate tax rates in the world at 35 percent. The unemployment rate got to 10 percent.
Neal, the top Democrat on the tax-writing House Ways and Means Committee, argued that while the president's plan lacks "real detail", it does not appear to do almost enough to help working families and small businesses.
"Trickle-down economics hasn't worked before, and it won't work now", Public Citizen's Weissman said, adding that U.S corporations already make record profits and are "dodging taxes at outrageous levels".
The threat of a rising budget deficit could erode support for the plan among lawmakers in Trump's own Republican Party. Only about 1 percent of MA taxpayers actually reach the top tax bracket, and even the alternative minimum tax - which has a reputation for biting into the middle class - affects less than 5 percent of all state returns.
When White House spokesman Sean Spicer was asked last week if Trump would authorize the IRS to provide more details of the audit, the press secretary deflected. Notably, residents of states with high taxes would not be able to deduct those taxes.
The plan calls for eliminating two key taxes that traditionally affect higher earners: the alternative minimum tax and the estate tax. Trump's initiative would apply the 15 percent rate to pass-throughs and multinational corporations.
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