On September 27, 2017, the Trump administration released its tax reform plan. The Unified Tax Reform Framework would cut income tax rates, lowering the top rate to 35 percent. It doubles the standard deduction but eliminates personal exemptions. The plan would reduce the corporate tax rate from 35 percent to 20 percent. It allows a one-time repatriation of corporate profits earned overseas.
The Framework would lower the maximum corporate tax rate from 35 percent to 20 percent. The United States has one of the highest corporate tax rates in the world. But that doesn't hurt large corporations. Most of them don't pay more than 15 percent. That's because they can afford tax attorneys who help them avoid paying higher taxes.
Trump's plan lowers the maximum tax rate for small businesses to 25 percent. That includes sole proprietorships, partnerships, and S corporations. Many of those are real estate companies, hedge funds, and private equity funds. As a result, 85 percent of the tax cut benefits the top 1 percent of earners. Most mom-and-pop small business won't benefit from the reduction. They don't earn enough to qualify for the top tax rate. The Framework does not mention increasing the tax on some profits, called carried interest. That's taxed at 15 percent instead of the income rate. It benefits private equity funds. Trump campaigned on making them pay their fair share.
The Framework would lower the maximum corporate tax rate from 35 percent to 20 percent. The United States has one of the highest corporate tax rates in the world. But that doesn't hurt large corporations. Most of them don't pay more than 15 percent. That's because they can afford tax attorneys who help them avoid paying higher taxes.
Trump's plan lowers the maximum tax rate for small businesses to 25 percent. That includes sole proprietorships, partnerships, and S corporations. Many of those are real estate companies, hedge funds, and private equity funds. As a result, 85 percent of the tax cut benefits the top 1 percent of earners. Most mom-and-pop small business won't benefit from the reduction. They don't earn enough to qualify for the top tax rate. The Framework does not mention increasing the tax on some profits, called carried interest. That's taxed at 15 percent instead of the income rate. It benefits private equity funds. Trump campaigned on making them pay their fair share.
Trump's plan would almost exclusively benefit the extremely well off. The people that Trump sent out to defend this plan couldn't speak with a straight face about the plan's benefits to the middle class or working class. There are few benefits to the working class or middle class.This plan is warmed over supply side trickle down economics, which is the discredited but never truly dead idea that if we would only reduce taxes on our "betters" then they would be inspired to open more businesses and hire more workers, and not instead buy another vacation home or more stocks or bonds.






