Trump’s Tax Cuts Likely to Benefit the Very Wealthy
President Donald Trump’s scheduled tour of the Midwest will tout his proposed tax cuts for small business owners and the middle class, Bloomberg writes. But few details exist of the eventual tax overhaul —and those that are out there suggest it may help the wealthy the most, according to the news service.
One of Trump’s goals is to cut taxes on so-called pass-through entities from 39.6% to 15%, for example, Bloomberg writes. This cut “would be a windfall” for owners of partnerships and pass-through businesses, Howard Gleckman, a senior fellow at the Urban-Brookings Tax Policy Center, tells the news service. Small business owners, on the other hand, may see an increase in taxes since many of them are already in the lower income tax bracket, he says.
Meanwhile, the principles outlined by the White House in April point to lower taxes for top earners, tax policy experts have said, according to Bloomberg. Some of the proposed changes may hurt the very wealthy, such as the elimination of state and local deductions, the news service writes. But many of those ideas would clearly benefit at least some of the top earners, such as the proposed cut to the top income-tax rate from 39.6% to 35%, the elimination of the Alternative Minimum Tax and the repeal of the estate tax, which affects estates with more than $5.49 million, according to Bloomberg.
One coalition has said ahead of Trump’s Midwest trip that the White House tax proposals would cut taxes for those earning over $1 million by an average of $190,560, while those earning under $45,000 would see an average tax cut of $240, the news service writes.
Trump’s tax cuts still have to be hashed out between the Republicans and Democrats, Bloomberg writes. And on Wednesday congressional Democrats stressed their position that they’ll fight any tax cuts for the top 1%, according to the news service.
“This is going to be one of the biggest fights of the next three or four months, and Democrats are ready for it,” Senate Minority leader Chuck Schumer (D-NY) told reporters in a conference call, according to Bloomberg.