GOP tax plan leaves the middle class in the cold
For all that’s crude and frightening about Donald Trump’s brand of nationalism, there was hope, at the start, that something positive would come of it — that this unlikely populist would find a way to champion the working people he exalted during the presidential campaign.
But the tax plan the White House released this week — a boon for the rich, with little to nothing for the middle class and the poor — has extinguished any hope for Trumpism. The president has fully embraced the Republican Party’s discredited “trickle-down” economics, and it’s clear now, if it wasn’t already, that his administration risks leaving one of his core constituencies — those squeezed in the middle — behind.
Trump’s victory in the presidential campaign was an outgrowth of many worrisome trends in this country, not least our drift toward a crisis level of income inequality. America’s richest 1 percent now hold more wealth than the bottom 90 percent, and the nation is seething about it.
Trump may not be focused on the numbers. But he gets it instinctually. You could see that two weeks ago at the White House when he told reporters that “the rich will not be gaining at all” from the yet-to-be-released tax plan. “We are looking for the middle class,” he insisted, “and we are looking for jobs.”
Well, if he looked, he certainly did not find.
The plan, developed with Republican congressional leaders, reduces the number of tax brackets from seven to three, with the top rate dropping from 39.6 percent to 35 percent and the bottom rate jumping from 10 percent to 12 percent.
The framework holds out the possibility of a fourth, higher rate for the wealthiest. But it’s hard to imagine a Republican Congress embracing that idea — and the president is showing no signs of leadership on this issue.
The plan would also slash corporate taxes from 35 to 20 percent, eliminate an estate tax that applies only to the uber rich, and get rid of the alternative minimum tax, or A.M.T., which is designed to ensure that the affluent pay a reasonable levy rather than deduct their way out of a tax bill.
Trump hasn’t released his taxes, so it’s difficult to say how, precisely, he would benefit from the proposal. But it seems certain he would. A partial leak of his 2005 tax return shows the A.M.T cost him $31 million that year.
The president and his family could also reap millions from a plan to cut taxes on “pass-through” business ventures, a broad category that covers everything from landscaping outfits to real estate development firms.
“The rich will not be gaining at all,” Trump said. That now seems like fiction.
There is much to criticize about the GOP tax plan. It would add hundreds of billions to the federal debt, for instance, making a mockery of Republicans’ concerns about red ink during the Obama years.
But most important, perhaps, it sends an ominous signal to the millions of people struggling to hold on in this country: In the Trump years, at least, no help is coming.