Taxes, Trump, Reform, Flat Tax and the Top 2 Percent

A large part of the Trump tax plan involves obfuscating how it will affect the top 2 percent. Because Trump seems to be in a perpetual state of campaign mode, and consequently, he has decided to play up middle-class tax cuts and shield his plans for tax cuts for the top earners, with nominal success.

Trump’s Flat Tax Opposition Trump’s stance on the flat tax is an illusion of being tough on the top 2 percent. Trump has stated that the concept of a flat tax is unfair to the poor and the middle-class and that the removal of the Earned Income Tax Credit, which is part of the flat tax, puts an undue burden on the poor. Trump has stated that taxing citizens for health insurance and benefits in accordance with the flat tax is also hurtful and unfair. He says that, ultimately, the flat tax only helps the wealthy and the top 2 percent because it lets them earn interest and capital gains without having to pay personal income taxes. However, the facts beyond the campaign rhetoric do not tell the same story.

Trump’s Tax Plan Scrutinized

click here Aside from Trump’s rhetoric on the campaign trail about the flat tax under his tax plan, the facts show that his plan was designed to help the top 2 percent and even the top 1 percent. According to the nonpartisan Tax Policy Center, those in the middle class will only get a 2 percent tax cut, while the tax cut for the wealthiest Americans will be 13.5 percent. Though Trump promised significant tax cuts to the middle class, he seems to have willfully hidden the tax cuts and benefits he was delivering to the wealthy. The purpose of the tax plan appears to be to shift the burden of taxes in favor of the top 2 percent. Those on Trump’s team have said that the plan would lead to an economic boom, injecting $4-$6 trillion into the economy after ten years as it slashes corporate income tax by 15 percent, yet another boon to the country’s top earners.

Trump’s Tax Plan and Income Inequality

The loudest argument against the tax plan is the apparent fact that it will deepen income inequality while it benefits the mega-rich. According to the Urban-Brookings Tax Policy Center, 47 percent of Trump’s tax cuts don’t go to the top 2 percent; they go to the top 2 percent. The average citizen shoulders the tax burden caused by these cuts with only minor cuts to their taxes. The top 2 percent will experience a level of wealth most of us have never seen when the new cuts meet new loopholes, and corporations find themselves enjoying new tax holidays on offshore income brought into the United States, enjoying even greater largesse. But this new revenue from the offshore money is in question; the argument is that Trump has no control over what these companies choose to do with their money and no means of making them invest those funds into the economy

Mnuchin Mincing Words

The man in charge of Trump’s tax policy, Steven Mnuchin, has argued  that “Any reductions we have in upper-income taxes will be offset by fewer deductions, so there will be no absolute tax cut for the upper class.” However, the Tax Policy Center reasons that the bulk of the tax cuts will head all the way up to the top 2 and 1 percent.

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