Former President Donald Trump's proposed tax plan has stirred up fresh controversy. A new analysis shows that it could provide substantial tax cuts for the nation’s wealthiest while burdening the rest with tax increases by 2026.
According to a recent Institute on Taxation and Economic Policy (ITEP) report, the top 1% of earners could enjoy an average tax cut of over $36,300. In comparison, the next 4% would see cuts averaging $7,200. Meanwhile, 95% of Americans could face tax hikes ranging from $600 to $1,800, depending on their income bracket.
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Trump, who often touts his tax plan as a boon for everyday Americans, would instead disproportionately benefit the wealthiest, the ITEP analysis suggests. Steve Wamhoff, ITEP's federal policy director and lead researcher, put it bluntly in an interview with Salon: “It does seem like there’s a whole bunch of complicated proposals here to just make the rich a little bit richer and then make everyone else worse off.”
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The middle 20% of American households, earning between $55,100 and $94,100, would be hit with an average tax increase of $1,530 – about 2.1% of their income, per the ITEP findings. The poorest 20% of households, those earning under $28,600, would face an average tax hike of $800, accounting for 4.8% of their income. Essentially, as family income decreases, the burden of these tax hikes increases.
Other experts, like Erica York, senior economist at the Tax Foundation, have offered a more nuanced take. She noted that Trump's proposals often combine regressive taxes, like tariffs, with more progressively distributed income tax cuts.
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“How each income group fares will depend on which combinations of tax and tariff ideas Trump ultimately pursues,” York told Salon in an email. She added that higher tariffs could "outweigh the benefits of the reduced taxes for lower and middle-income groups."
Key to Trump’s tax strategy is his plan to extend most of the provisions from his 2017 tax law, which expires at the end of 2025. His new proposals include reducing the corporate tax rate from 21% to 20% or even 15% for certain U.S.-made products and eliminating overtime pay and tips taxes. Additionally, Trump has suggested a sweeping 20% tariff on all imported goods and a steeper 60% tariff on goods from China.
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Proponents argue that Trump's plan would boost U.S. jobs and support working-class families. “President Donald Trump passed the largest tax CUTS for working families in history,” his campaign said in a statement to Salon. However, critics warn that the tariffs would function as a federal consumption tax, disproportionately affecting low-income and middle-class families.
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This article Expert Finds Trump's Tax Proposal Drains Money From 95% Of Households And Funnels It To The Top 5%, Widening Wealth Gap originally appeared on Benzinga.com
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