An analysis of Republican presidential nominee Donald Trump’s plan to overhaul the U.S. tax code by the advocacy group Citizens for Tax Justice is the latest to conclude that, despite promises to the contrary, the proposal would deliver massive tax breaks to the wealthiest Americans and a relative pittance to the poorest.
When Trump appeared before the Economic Club of New York earlier this month to tout his revised economic policy proposal, he said the changes in the tax code would overwhelmingly favor the poor and middle class.
“[B]ecause we have strongly capped deductions for the wealthy and closed special interest loopholes, the tax relief will be concentrated on the working and middle class taxpayer,” Trump assured listeners. “They will receive the biggest benefit – it won’t even be close.”
However, according to the CTJ analysis out Monday, there is literally no sense in which that is the truth. The distributional effects of the tax plan are clearly tilted toward the wealthy from virtually every angle.
When it comes to the raw dollar amount saved by taxpayers at separate ends of the income spectrum, those in the bottom 20 percent of the income distribution would save about $200 a year. People in the top 1 percent would save $88,410.
If the criterion is percentage of income, well, the wealthiest do better there, too. On average, the bottom 20 percent recover 1.3 percent of their income under the Trump plan. The top 1 percent recover 5.1 percent.
And finally, on the percentage of the overall reduction in taxes paid, the wealthiest again come out on top. About 2 percent of the net tax cut accrues to the benefit of the bottom 20 percent. The top one percent collect 44 percent of it.
“Trump’s revised tax proposal would reduce federal revenues by $4.8 trillion over the next decade,” the report determined. “Of that, $2.1 trillion would be due to personal income tax and payroll tax cuts; $2.4 trillion would be due to corporate tax cuts, and another $0.3 trillion in revenue loss would be due to repeal of the federal estate tax.”
The Trump campaign has argued that the tax plan will help drive gross domestic product up sharply, thereby offsetting the tax cuts with higher revenues. However, to date even the most optimistic assessments of the plan by outside authorities have determined that Trump’s plan would add trillions of dollars to the national debt.