According to a report from the Urban Institute & Brookings Institution Tax Policy Center (TPC), America’s top 1% after-tax gain would stand at 17.8% under Trump’s tax plan, while the middle class would benefit from just a 3.3% gain.
The Rich Benefiting Big from Trump’s Proposed Budget
In other words, 40% of the tax cut in Trump’s budget proposal would benefit the 1%, while the rest would benefit the 99% of Americans. TPC noted that the bulk of the benefits deriving from the proposed cuts would go to the highest-earners.
However, those tax policies would cost the federal government trillions of dollars in lost tax revenue over a decade. According to The Hill, the tax cuts proposed by the Trump administration will lead to $7.8 trillion losses over a decade. Also, a budget plan that will mix the cuts with alternative sources of revenue would lead to $3.5 trillion losses.
Treasury Secretary Steven Mnuchin told the New York Times in April that the budget plan could help boost economic growth, offsetting the losses.
This will pay for itself with growth and with reduction of different deductions and closing loopholes,
Mnuchin said at the time.
One Broken Promise
He also pledged that the proposed budget would “create massive amounts of revenues” as it would grow the economy and bring in additional revenues. The Times noted back then that Mnuchin’s claims are “virtually impossible” to turn into reality, as many Republicans conceded.
The NYT pointed out that economic growth will indeed reduce revenue losses over one decade, but the associated deficits would bring even higher revenue losses over the next 20 years as business investments would shrink exponentially.
In November, Trump’s Treasury Secretary promised no “absolute tax cut for the upper class.” However, that pledge was broken in June when Mnuchin said that his job was to come up with a plan that meets the president’s objective while getting the final nod from Congress.
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