President Donald Trump has just unveiled his tax reform plan. Though many financial analysts and tax experts say it lacks detail, one of its key, so-called reforms is cutting down the number of different tax rates from seven to just three: 15%, 25% and 35%.
Guess who will pay the lowest tax rates?
Why of course, it will be corporate America. It will be bankers and other major taxpayers, including companies owned by Trump and his family and his large corporate friends.
Cutting the $39.6 tax rate now paid by pass-through entities to 15% will be a boon to high-income people who can use LLCs and other businesses to report their income, according to Joseph Rosenberg of the Tax Policy Center. Under Trump’s plan, corporations paying a 35% tax rate will also see their rate slashed to 15% if the president’s reforms are enacted.
The cuts Trump promised for the middle-class are largely missing from his proposal, according to tax experts. Also missing is a clear understanding of how the revenue will be made up so as not to increase the deficit as Trump promised during his presidential campaign.
Trump says that these huge tax cuts for the country’s highest taxpayers will generate more jobs and greater economic growth. We believe that trickle down economics have never worked, but the President seems convinced this time they will.
What the administration will actually do is add trillions of dollars to the nation’s deficit.
How he plans to make up this gap makes us really nervous.
It’s our feeling he will try to make up for the lost revenue by cutting services to the middle-class, the poor and seniors. So, right now, we recommend you hold on to your wallets.