Former President Donald Trump’s proposed tax plan has sparked new controversy. A new analysis shows this could deliver substantial tax cuts to the country’s wealthiest, while leaving the rest with tax hikes by 2026.
According to a recent report from the Institute on Taxation and Economic Policy (ITEP), the top 1% of earners could enjoy an average tax cut of more than $36,300. By comparison, the next 4% would see cuts averaging $7,200. Meanwhile, 95% of Americans could face tax increases ranging from $600 to $1,800, depending on their income group.
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Trump, who often touts his tax plan as a boon to ordinary Americans, would instead disproportionately benefit the wealthiest, the ITEP analysis suggests. Steve Wamhoff, federal policy director and lead researcher at ITEP, put it bluntly in an interview with Salon: “It seems like there’s a whole series of complicated proposals here to make the rich a little bit richer and then make everyone else worse off. ”
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The middle 20% of U.S. households, who earn between $55,100 and $94,100, would face an average tax increase of $1,530 — about 2.1% of their income, according to ITEP’s findings. The poorest 20% of households, those earning less than $28,600, would face an average tax increase of $800, accounting for 4.8% of their income. As household income declines, the burden of these tax increases essentially increases.
Other experts, such as Erica York, senior economist at the Tax Foundation, have offered a more nuanced view. She noted that Trump’s proposals often combine regressive taxes, such as tariffs, with more progressively distributed income tax cuts.
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“How each income group fares will depend on what combinations of tax and tariff ideas Trump ultimately pursues,” York told Salon in an email. She added that higher rates “outweigh the benefits of reduced taxes for lower and middle-income groups.”
Key to Trump’s tax strategy is his plan to extend most provisions of his 2017 tax law, which expires at the end of 2025. His new proposals include lowering the corporate tax rate from 21% to 20% or even 15% for certain US states. -made products and eliminating taxes on overtime and tips. Additionally, Trump has proposed a sweeping 20% tariff on all imported goods and a higher 60% tariff on goods from China.
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Supporters argue that Trump’s plan would boost American jobs and support working families. “President Donald Trump has passed the largest tax cut for working families in history,” his campaign said in a statement to Salon. However, critics warn that the rates would function like a federal consumption tax, disproportionately hitting low-income and middle-class families.
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This article Expert finds that Trump’s tax proposal drains money from 95% of households and funnels it to the top 5%. The Growing Wealth Gap originally appeared on Benzinga.com
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