Trump’s tax plan is in the trash, but the replacement may be much worse
Some view the search for new options as a result of Trump’s refusal to set clear parameters for his plan and his exceedingly challenging endgame: reducing tax rates enough to spur faster growth without blowing up the budget deficit.
Actually, Trump’s plan is quite clear. Over and over it hammers home the same effect: more money for billionaires, more money for billionaires, more money for billionaires, and hey, America, keep the change.
By and large, the more you make, the better you would fare under Trump’s proposed plan. But one group of filers could actually see their tax bill go up, depending on their tax bracket: families with children — especially single parents.
On average, people making $50,000 would see a 1.2 percent cut in their taxes under Trump’s plan. Those making over a million would average 9.3 percent. So $600 for Jane Average, and at least $93,000 for Daddy Warbucks. Add in children, and that $50,000 parent could actually end up paying more in taxes than she does now, while those at the top skate away with another $40,000.
Even this lopsided welfare for millionaires approach would be acceptable, even desirable, for Republicans, if it wasn’t that the supposed economic benefits of Trump’s plan are so illusory. His plan would blow up the deficit with trillions in new debt. Hand-waving may be enough to make that debt vanish on the campaign trail, but as Trump’s team tries to actually turn the plan into legislation, they’re having a hard time plugging that hole in the dike.
The group attempting to write legislation from Trump’s tax plan actually went so far as to propose using a (dum dum dum dah!) carbon tax to put a finger in the deficit dike, but that plan was almost immediately shot down. There’s also the possibility of a border tax on imported goods, though that probably violates trade agreements. Finding a way to raise the capital from ordinary Americans so that billionaires can walk away with billions more is proving difficult.
But there is one possibility so intriguing Republicans may bite despite the fact that it does nothing to close the gap.
One circulating this past week would change the House Republican plan to eliminate much of the payroll tax and cut corporate tax rates. This would require a new dedicated funding source for Social Security.
That’s right. Trump’s tax plan may write out of existence the payroll tax that funds Social Security. Killing that program under the pretense of tax reform may prove an irresistible temptation for Republicans.