New Trump tax plan will cost the poor
Donald Trump has been all over the place on taxes, but now that he’s having conservatives rewrite his plan, the poor will be harmed.
Last month, Trump enlisted CNBC host Larry Kudlow and Heritage Foundation fellow Stephen Moore to give him recommendations on how to revamp his tax plan,according to Politico, which he spent the weekend saying was a “concept” and a starting place for negotiations. Trump at first insisted that under his administration the wealthy will pay more in taxes, but he revised that stance to say that while the rich will get a tax cut no matter what, their tax cut could be shrunk during negotiations.
The rewrite process might do that for him. The goal of the recommendations is to reduce the overall cost of the package, which was estimated to be about $10 trillion over a decade. One suggestion they’re giving Trump is to reduce the top tax bracket paid by the wealthiest to 28 percent from its current level of 39.6 percent — still a substantial bonus for the rich, although not quite as much as Trump’s original positionof dropping it to 25 percent. At the same time, Kudlow and Moore will propose that Trump reduce the capital gains tax paid on investment income rather than salaries, which overwhelmingly benefits the better off, to 15 percent from its current level of 23.8, a bigger reduction than Trump’s plan of 20 percent.
While the rich would keep the bulk of their tax cuts, the poor wouldn’t fare so well. Trump had originally promised to increase the number of low-income Americans who don’t owe any income taxes to 33 million people. Kudlow and Moore will instead suggest lowering the threshold so that more poor people would end up owing taxes, although haven’t yet said what the new threshold would be.