White House Treasury Secretary Steve Mnuchin said that President Trump wants to get tax reform done and help grow the economy even though new analysis of a recent tax reform proposal by the Trump administration revealed that it stands to benefit wealthiest Americans by a larger margin over the middle class while adding trillions more to the federal deficit.
President Trump’s tax reform proposal called, “Unified Framework For Fixing Our Broken Tax Code” was unveiled on September 27th and includes a simplification of the tax brackets from 7 to 3 by adopting tax rates of 12, 25, and 35 percent for individuals, tax on pass-through business income with a top rate of 25 percent, lowering the corporate tax rate from 35 to 20 percent, and repealing a variety of taxes such as the estate tax, and alternative minimum taxes.
Speaking on ABC’s This Week, Treasury Secretary Mnuchin was told by host George Stephanopoulos that based on Trump’s financial disclosure form which reveals the president had $500 million in taxable income from taxable entities taxed at 39. 6 percent, if his tax rate is cut to 25 percent as is proposed under his tax reform plan, then President Trump stands to save $75.7 million.
Mnuchin said that it’s very important that they have the “guard rails” around the pass through tax rate rules so that it isn’t about creating a tax cut for the rich and emphasized there’s going to be full transparency as they go through the legislative process.
Based on new analysis released on September 29th from the non-partisan Tax Policy Center, using the framework of President Trump’s new tax proposal, the wealthiest Americans would receive the largest tax cuts with the wealthiest 1 percent whose incomes exceed $ 730,000 receiving about 50 percent of the total tax benefit, and their after tax income would result in an average increase of 8.5 percent.
In 2018 the average tax bill for all income groups would decline by nearly $1,600 on average.
Taxpayer groups in the bottom 95 percent of the income distribution would see modest tax cuts, with after-tax incomes increasing between 0.5 and 1.2 percent.
Tax Policy Center analysis revealed that business income tax provisions, including those impacting corporations and pass-through businesses, are expected to lower federal revenues by $2.6 trillion over the first ten years while the repeal of estate and gift taxes would reduce another $240 billion.
ABC host George Stephanopoulos pointed out to Treasury Secretary Mnuchin that twenty-one of twenty-six economists from Bloomberg have concluded that Trump’s tax plan would increase the deficit and the Trump administration’s growth projections are too strong.
Mnuchin replied that they are confident that they will get the growth but if they don’t, then that’s obviously something that can be changed over time.
Sen. Bernie Sanders said on ABC’s This Week that Trump’s latest tax reform plan is really “bad policy” and also called it the “Robin Hood principle in reverse” and a “massive transfer of wealth.”
Sen. Sanders said he’s not clear why anybody would support a proposal which gives massive amounts of tax breaks to people who don’t need it at a time of incredible income and wealth inequality in America and later emphasized that we have got to focus on the needs of the middle class and working families of this country instead of the top 1 percent.
“No tax breaks for the rich. They are repealing the estate tax. The estate tax only applies to the top .2 of 1 percent, millionaires and billionaires like the Walton family of Walmart, like the Koch brother’s family, like the Trump family: $269 billion in tax breaks for the top two-tenths of one percent over the next 10 years” Sanders said.
“This is not a tax break for the rich? Well, I don’t know what a tax break for the rich is” Sanders added.
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