Trump Touts ‘giant, beautiful, massive’ Tax Cut

And since Trump has made no attempt to broaden his support since taking office, the continued loyal support of his political base is an existential requirement for his presidency – one reason why he has stoked cultural and race controversies that resonate with his largely white, rural constituency, including his showdown with kneeling National Football League players.

Trump promised to help the middle class, and he could deliver by significantly raising the standard deduction. President Trump keeps saying that he can make bigger paychecks happen. Then the Reagan administration engineered a major tax cut, arguing the virtues of economic growth via “trickle down” economics.

The tax reform plan President Donald Trump touted Wednesday is so vague it is hard to evaluate – and easy to doubt – one of its central claims: that it’s a “middle class miracle” because of a combination of new tax credits, rate cuts and deduction changes.

Other Republican lawmakers have picked up the talking point. But unfortunately, the business tax preferences in Trump’s plan are created to provide nearly no benefit to lower- and middle-income people who own small businesses. “There’s no doubt about it, this country needs this”.

However, a recent study found that lowering tax rates on corporate dividends, which went into effect in 2003, did not encourage corporate investment or hiring.

Trump last week suffered a big loss after the fight to repeal and replace the previous administration’s healthcare law, known as Obamacare.

“By 2027, the top one percent would get 80 percent of the plan’s tax cuts”. Average weekly wages hit $271 a week by 1990. A case can be made that cuts in capital-gains taxes might increase revenue. Their conclusions are all over the place. But the president insists his tax reform plan would cut income taxes for almost everyone. “It’s irresponsible to overhype the claims”.

Critics of Trump’s tax plan say – rightly or wrongly – that Trump is only concerned with giving a tax break to the wealthy.

Alan Viard, a resident scholar at the American Enterprise Institute, said the issue is complex. Trump promised to protect Social Security and Medicare, but how will he weigh that promise against his promise to slash corporate taxes?

As with most things though, the devil is in the detail.

Trump quickly tried to dispel the notion that he would personally benefit from his own changes to the tax system. Simply cutting the rates isn’t enough. But the net benefit for many in the middle class could be narrowed if they lose the personal exemption and some tax deductions, such as for medical expenses. Nevertheless, the fact that Trump and at least some congressional Democrats are interested in bargaining suggest that this policy debate could yet end up producing actual smart, bipartisan reform. It has provisions such as allowing companies to deduct the costs of building a new factory right away.

Other elements of the plan are clearly wins for the wealthy. That’s harmful on a lot of levels. “It means you’re more loyal to your political bosses than the people who represent you”.

The 1986 legislation actually had the reverse problem. Result: over the next decade periodic recession periods followed and the deficit, debt and economic inequality grew rapidly.

For now, much of the American tech industry waits to see if it can bring its money home. What’s more, Republicans have no idea how to pay for any of this.