New analysis from Tax Policy Center, supported by Brookings and Urban Institute, revealed yesterday that President Trump’s tax cut plan he presented in April could reduce federal revenues by as much as $ 7.8 trillion over the next decade.
President Trump proposed in April a tax plan that he called the “largest in U.S. history.”
It consists of lowering the corporate tax rate from 35 percent to 15 percent, simplifying the tax code from 7 brackets to 3, doubling the standard deduction, repealing of the Alternative Minimum Tax, the estate tax, the Affordable Care Act’s 3.8 percent net investment income tax, and offering broad based tax cuts for individual Americans, with largest tax cuts going to the wealthiest Americans.
Trump’s tax plan left out many of the critical details needed for a full, comprehensive analysis.
But according to the Tax Policy Center’s latest analysis, Trump’s tax plan, without raising revenues, would reduce federal revenues by $7.8 trillion over the next decade and by $13.1 trillion over the following decade.
Adding tax revenues into Trump’s tax plan would reduce revenues by $3.5 trillion from 2017-2027 and by $5.7 trillion from 2028-2037.
The wealthiest Americans in the top 1 percent, who earn more than $ 732,000 annually would get an average tax cut of $ 270,000 or 18 percent of after tax income.
Americans in the top 0.1 percent will see their after tax incomes increase by an average of $1.4 million or nearly 20 percent.
The top 1 percent get 40 percent of the benefits.
Trump Tax Plan With Revenues
If Trump’s tax plan adds revenues, the size and scope of his tax cuts would be lowered.
The top 1 percent would receive a tax cut of approx. $ 175,000 while the low and middle class would have their after-tax incomes rise by around $760 .
Half the benefits would go to the top 1 percent.
During the Tax Policy Center’s analysis, they included a tax cut package with individual rates of the proposed 10, 25, 35 percent and the corporate rate at 15 percent.
The Tax Policy concluded at the end of their analysis the following statement:
“While we don’t know what tax plan the president will propose in the coming months, it would have to look very different from what we’ve seen so far to avoid adding trillions of dollars to the debt and heavily skewing its benefits to the highest income households.”
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