As Trumpcare withers away in the Senate in the face of fierce grassroots opposition, two new analyses published on Wednesday show that President Donald Trump's tax agenda—billed as his next big domestic endeavor—would primarily benefit Trump himself and other wealthy Americans while pushing a larger share of the tax burden onto middle class families.
"The top 0.1 percent, earning above $3.4 million a year, would get an average tax cut of $937,700, or a 13.3 percent boost in after-tax income."
—Dylan Matthews, Vox
Although Trump has yet to release a detailed version of his tax plan, a new analysis by the nonpartisan Tax Policy Center (TPC), released Wednesday, concludes the proposals his administration has floated so far would, if enacted, "provide the bulk of the benefits to the highest-income households."
TPC found that under Trump's tax plan, around "40 percent of the tax cut would flow to households in the top one percent of the income distribution, giving those earners an annual tax cut of around $270,000."
In this regard, Trump's tax agenda is perfectly in line with the Senate GOP's healthcare bill, which would provide hefty tax cuts to the ultra-rich while deeply slashing Medicaid.
As Americans for Tax Fairness (ATF) found in a study also published on Wednesday, among the principle beneficiaries of the Senate's plan would be Trump himself.
ATF estimated that "President Trump could get a personal tax cut of between $1.4 million and $2.8 million a year" if Republicans succeed in repealing the Net Investment Income Tax, a key Obamacare tax aimed at the rich.
"Now we know how much President Trump stands to benefit personally if Republicans eliminate just one tax on the wealthy under the Affordable Care Act," said AFT executive director Frank Clemente. "Instead of giving himself a tax cut worth up to $2.8 million, the president should keep his campaign promises not to cut Medicaid and Medicare."
Trump and his advisers have attempted to characterize their overall tax agenda as one that would provide benefits to all, and not just the top one percent.
Analyzing TPC's new report for the Washington Post,would result in an increase in taxes for nearly 1 in 5 American households."
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"And among those in the middle class, almost a quarter would see their taxes go up," Ehrenfreund notes. "For households with annual incomes between $49,000 and $86,000, those facing a hike would see an average annual increase of $1,000."
For those lower-income families that would see tax cuts under Trump's plan, they would be nearly undetectable compared to those lavished upon the wealthiest Americans.
Vox's Dylan Matthews observed that "the overall plan would give the average family earning under $25,000 per year a $40 tax cut, or a 0.3 percent boost in after-tax income. The top 0.1 percent, earning above $3.4 million a year, would get an average tax cut of $937,700, or a 13.3 percent boost in after-tax income."
If you just look at the tax cuts he's proposing, 60.9 percent of the benefits go to the top 1 percent of Americans. That's a pretty astonishing tilt toward the rich. But if you look at the combined effects of the cuts and the revenue raisers, 76.3 percent of the benefits go to the top 1 percent, and 94.8 percent go to the top 5 percent.
Michael Linden, a fellow at the Roosevelt Institute, broke Trump's tax agenda down into three simple bullet points:
So, to recap. Trump plan, according to TPC:
✔️ Million $ tax cut for hyper-rich
✔️ Tax increases on 20-25% of everyone else
✔️ No econ boost
— Michael Linden (@MichaelSLinden) July 12, 2017