Donald Trump tried to sweet talk Americans when he announced his plans to revamp the tax code at a press conference at Trump Tower in New York. “It will provide major tax relief for middle income and for most other Americans,” he told his audience. “It will simplify the tax code, it’ll grow the American economy at a level that it hasn’t seen for decades,” he said further.
This is how Trump wanted to revamp the tax. The single Americans earning less than $25,000 will not owe any tax. Married couples with less than a joint income of $50,000 will not also owe tax. This will account for nearly 75 million households. For all other Americans who will owe income taxes, they will save an average of nearly $1,000 each. Trump will also introduce a simpler tax code with only four brackets – 0 percent, ten percent, twenty-percent and 25 percent. This new tax code eliminates the marriage penalty and the Alternative Tax or AMT. And no family will have to pay the death tax.
At first glance, Trump’s tax plans looked as if it is pro-poor. A few seconds into it, realization sets in that the plan is actually advantageous the top-earners, billionaires at that, because their tax rates will come down. The tax plan is like a meringue – sweet, tempting, but is only made of whipped white egg and too much sugar that it actually does not have any nutritious benefit. In the long term, when Trump sits at the White House come November 2016, America could then be thrust into lost in revenues.
Robert Williams, a senior fellow at the Tax Policy Center, said, “If there’s a tax cut for middle-income people, there has to be a tax hike for high-income people for it to be revenue neutral.
“The tax rates for high income taxpayers are large enough that you need very big cuts in the tax preferences to make up the lost revenue. I don’t see anything in the plan that indicates there would be a large reduction enough in those preferences,” he told The Chicago Tribune.
From his initial analysis, he can say that the tax plan “doesn’t appear to make the rich pay any more, and what detail we have suggests they would probably pay less. From the looks of it, they would do very well,” William stressed.
CNN noted that there is a tinge of hypocrisy in Trump’s tax proposal. Asked how his new tax code will affect his own tax rate, being the real estate magnate that he is, Trump was elusive. “We’re reducing taxes, but believe me, there will be people in the very upper echelon that won’t be thrilled with this,” Trump told CNN.
Asked how much tax he currently pays, Trump was hard to pin down. “I fight like hell to pay as little as possible,” he said.