With a straight face on ABC’s ”Good Morning America” on Thursday, President Donald Trump’s chief economic adviser Gary Cohn said that the administration’s tax plan doesn’t offer a tax cut to the wealthy.
But the plan unveiled by the Trump administration Wednesday clearly tells a different story. The rich ― and also corporations, which are technically people according to the Supreme Court ― are by far the biggest beneficiaries of the preliminary outline released by the White House.
Initially, Cohn tried to evade George Stephanopoulos’ questions on how the rich would benefit under Trump’s tax plan, but finally at the close of the interview he just seemed to give in to the untruth.
“Will the wealthy get a tax cut or not?” Stephanopoulos pressed.
“The wealthy are not getting a tax cut under our plan,” said Cohn, who is the director of the National Economic Council and is leading the push for tax cuts. The former Goldman Sachs president was also in the running for Federal Reserve chair before he openly criticized the president’s equivocal remarks on white supremacy.
Though the Trump administration’s plan is sketchy on key details ― including information on a much-ballyhooed child care tax credit ― as proposed thus far, the plan is a big fat kiss to the wealthy.
A stunning 80 percent of the so-called “tax relief” in Trump’s plan would go to households in the top 1 percent income bracket, according to a rough analysis released Wednesday by the Center on Budget and Policy Priorities, a progressive think tank.
The top 1 percent of income earners would get a $150,000 tax cut, on average, according to the center. But the real winners would be the tippy top income earners. Households making more than $3.8 million would see their tax bills drop by about $800,000 a year or 21 percent, the report found.
Meantime, a married couple with one child making $48,000 a year would get a tax cut of... wait for it... $180.
In his interview with Stephanopoulos, Cohn refused to even say that all middle-class Americans would get a tax break under his plan ― even as he claimed that the plan was good for working families.
“I can’t guarantee everything,” Cohn said, noting that you’ll always find an exception to “every rule.”
He estimated that median-income households (those earning $55,000) would get a tax cut of between $650 - $1,000.
The plan doesn’t include the kind of tax cuts that would guarantee real savings for working people ― some of whom don’t owe federal income taxes but pay the federal government through other mechanisms, the New York Times explained.
For example, cutting the payroll tax would essentially give millions of working people a raise. The Trump administration could’ve also proposed increasing the earned income tax credit, which would put real money in low-income earners’ pockets.
Even without any analysis, it’s fairly clear how the plan would benefit the rich. First, the administration wants to lower that top individual income tax rate to 35 percent from 39.6 percent. While the plan does leave open the possibility that Congress could create an additional top rate, which Cohn noted, there are no further details on that at the moment.
Cohn argued on Good Morning America that because the plan gets rid of the standard deduction, those in the top bracket would still wind up paying more. But the claim is hard to parse, since the tax plan actually doubles the standard deduction.
Even more beneficial perhaps to the wealthy ― and definitely to Trump himself ― the plan would eliminate two taxes that only are paid by the rich. The estate tax, levied on just a few multimillionaire families when someone rich dies and the alternative minimum tax, which was created decades ago to ensure rich people pay their fair share of taxes.
Eliminating both these taxes would be a great deal, in particular, for President Trump.
In 2005, Trump was forced to fork over $31 million because of the alternative minimum tax. It’s possible he may have paid it in other years, but we don’t know because the president refuses to release his tax returns.
The estate tax is what rich heirs pay when they receive an inheritance greater than $5.5 million. So if Trump were to die, and the so-called “death tax” still existed, his heirs would have to give back 40 percent of his money. If Trump is worth $10 billion as he claims, that means $4 billion.
Getting rid of the estate tax then is a big multibillion-dollar payoff to Ivanka, Don Jr. and whoever else stands to inherit Trump’s money.
His plan would also lower the corporate tax rate, which the administration claims will help create jobs.
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