Wednesday, April 26, 2017

Trump tax proposal is a huge give away to the rich - Test your pundit skills here

Bad News

So, Trumps tax proposal, which is a really a one page memo of bullet points, is a good test for any of us want-to-be progressive pundits. It is definitely not a tax plan. It contains no details, costs, analysis or review of effects on the debt.

All of us pundits in training should be able to explain and rip apart Trumps tax proposal in about 30 seconds. Please write your version of why Trumps tax plan is bad for the average US citizen and the country.

Then compare to our list

Here is ou list...

1. Gives huge amounts of money to rich people. Reduces tax rate to $15% for some pass through business like Trump's real estate companies. 
2. May cause an asset / stock market bubble driving up real estate prices.
3. Rewards investment income and rents at the expensive of wages.
4. Increases inequality. Does almost nothing for middle class and truly nothing for the poor.
5. Cuts government revenue for crucial programs including state and local programs. Eliminates state and local tax deductions. 
6. The tax proposal also drops the corporate tax rate to 15%. It is also a huge give away to corporations who have been holding tax money overseas and avoiding and minimizing taxes for years.
7. Eliminate the Alternative Minimum Tax (which trump pays).
8. And scariest of all, it may eliminate the deduction for employer sponsored healthcare, financial wrecking our current healthcare system


It increases the national debt by giving money for consumption rather than investment (ie, yachts and shoes rather than research, colleges and roads). Note: The author believes that below a certain ratio of debt-to-GDP, debt incurred for investments can have an overall positive effect on the economy.

Currently, the tax plan would add $3 Trillion to $7 Trillion to the debt.  It also assumes a growth rate of 3%. The US GDP growth rate is 0.7% in first quarter of 2017.

Tax proposal was rushed to meet 100 days deadline

The tax plan is little more than an outline or an opening move in a negotiation. But, it was put together by two of the more competent members of the Presidents staff:  Gary D. Cohn and Steven Mnuchin.

While it initially looked like the administrations was getting it's act together, this grab bag taxes proposal, shows how disorganized they are.

Version 3

No comments:

Blog Archive