After failing to fund President Trump’s border wall, failing to repeal or replace Obamacare, and failing to reverse the Iran deal, Republicans have moved on to their next agenda item: failing to lower taxes for those who pay the highest percentages already.
Trump’s proposal includes a dramatic cut to the corporate tax rate, from 35 percent to 20 percent, but includes a “surcharge on the wealthiest Americans,” according to AP. That corporate tax decrease is still less of a tax cut than Trump originally proposed – he stated for over a year that he wanted the top corporate tax rate to be 15 percent, not 20 percent.
The standard deduction for married taxpayers would nearly double, and charitable and mortgage deductions would remain in place. Despite the surcharge on top earners, Senate Minority Leader Chuck Schumer (D-NY) predictably labeled the tax bill a boon to the wealthy, leaving “crumbs” to middle class Americans and delivering a “punch to the gut of working Americans.”
What prompted Trump’s move on taxes for the highest earners? His desire to jump in bed with Democrats again, according to Politico:
President Donald Trump — eager to work with Democrats on tax reform — upended Republican leaders’ plans to cut taxes for the rich just as the party is set to unveil its much-awaited tax proposal.
During a meeting at the White House on Tuesday, Trump made a point of telling GOP and Democratic lawmakers that his top tax advisers — Gary Cohn and Treasury Secretary Steven Mnuchin, both very affluent individuals — won’t see their tax bills reduced. Both men nodded in agreement, sources in the room told POLITICO.
This is ridiculous. Here is the breakdown in percentage of total federal taxes paid by income level in the United States as of 2011, according to the Congressional Budget Office:
Highest Quintile (above $234,700): $57,500
Fourth Quintile (above $83,800): $14,800
Third Quintile (above $49,800): $7,400
Second Quintile (above $29,600): $3,200
Lowest Quintile (above $15,500): $500
When you factor out the government transfers received, only the top two quintiles actually pay net federal taxes: $46,500 for the top quintile, $700 for the fourth quintile. As Mark Perry of American Enterprise Institute writes:
…the richest 20% of Americans by income aren’t just paying a share of federal taxes that would be considered “fair” — it goes way beyond “fair” — they’re shouldering almost 100% of the entire federal tax burden of transfer payments and all other non-financed government spending.
But it’s apparently unpopular to talk about actual statistics when we’re busy demagoguing high income earners who have supposedly “rigged” the tax system to their benefit, despite paying a higher effective tax rate than any other quintile and despite shouldering the entire burden of federal spending.
(First reported by the Daily Wire) http://www.dailywire.com/news/21615/trumponomics-trump-tax-plan-proposes-tax-increase-ben-shapiro (September 27, 2017)
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