Congressional Black Caucus Chairman Cedric Richmond joined a chorus decrying President Donald Trump’s tax proposal, which would slash individual and business taxes and erase a surtax that funds the Affordable Care Act.
Richmond (D-Louisiana) and others noted that Trump’s plan would amount to a multitrillion-dollar shift from federal coffers to America’s richest families and their heirs.
It sets up a politically fraught battle over how best to use the government’s already-strained resources, the New York Times reported.
The outline offered by Trump counts less a tax overhaul plan than a list of costly cuts with no price tags attached, the newspaper noted.
It calls for tax reductions for individuals of every income level as well as for businesses large and small.
However, the vast majority of benefits would accrue to the highest earners and largest holders of wealth, according to economists and analysts, accounting for a lopsided portion of the proposal’s costs.
“President Trump’s tax proposal gives tax cuts to the wealthiest Americans at a time of historic wage and wealth inequality, and it leaves far more questions than answers,” Richmond said.
“First, how will the tax cuts he proposes help vulnerable Americans struggling to make ends meet, particularly when President Trump and Congressional Republicans plan to strip them of health care coverage and slash funding for government programs and services they depend on?” Richmond said. “More importantly, how will President Trump benefit from the tax cuts he proposes? We would know the answer to the latter question if President Trump had released his tax returns as all other presidents in modern history have done — including President Nixon.”
The health care proposal would hurt minorities and the poor, he said, adding that Trump and Republicans plan counts as a $600 billion tax cut for insurance company executives that would take coverage away from millions of Americans.
“In addition, the proposal would eliminate essential benefits for Americans like prescription drugs, maternity care, and protections for people with pre-existing conditions,” Richmond said. “This bill would be even more devastating for the health of African-Americans and other vulnerable communities than the last failed Republican health care bill.”
To understand how deep the effects of Trump’s tax proposal run would be to realize that repealing the estate tax — which stands as part of the plan — would affect just 5,300 or so fortunes a year.
For 2017, couples can shield up to $11 million of their estates from any taxation, leaving only the largest inheritances subject to taxation. Repealing the estate tax alone would cost an estimated $174.2 billion over a decade, the nonpartisan Tax Policy Center noted.
Reducing the rate on capital gains, noncorporate business taxes and those in the highest bracket, as well as repealing the alternative minimum tax, would also ease the burden on wealthier Americans.
So would the repeal of the Affordable Care Act’s 3.8 percent surtax on the investment income of high earners, put in place to subsidize health coverage for low-income Americans.
“Although Trump has billed his tax plan as cutting taxes for everyone, it could actually raise taxes for millions of working and middle class Americans,” said Rebecca Kysar, a professor at Brooklyn Law School who has penned articles for the Cornell Law Review, the Iowa Law Review, the Notre Dame Law Review, the University of Pennsylvania Law Review, the Washington University Law Review, and the Yale Journal of International Law.
If the administration eliminates the personal exemption and head of household filing status, as was proposed in the campaign, the hardest hit would be single-parent families,” Kysar said. “The majority of the proposed tax cuts would end up in the pockets of the extremely wealthy primarily due to reforms on the business side, estate tax and AMT repeal, cutting the top rate, and the elimination of the Obamacare investment tax.”
In an earlier editorial, Kysar wrote that “it is not realistic to expect the tax code to be set in stone. But the pillars of tax reform should be stable enough to form the basis of long-term investment and growth. Radical, partisan tax reform will prove short-lived and ineffective.”
“Reform that gives the lion’s share of its benefits to the wealthy and adds trillions to the debt runs the risk of exacerbating inequality within and between generations, perhaps alienating Trump voters who elevated him to the White House based on his populist rhetoric,” said Kysar, who teaches and researches in the areas of federal income and international tax, as well as the federal budget and tax legislative processes.
Sen. Bob Casey (D-Pennsylvania) said Trump’s proposal would hamper those in his state who are most in need of help.
“This scheme is a massive tax giveaway to millionaires, billionaires and big corporations at the expense of middle-class families in Pennsylvania,” Casey said. “This tax plan may help the wealthiest and the biggest corporations avoid paying their fair share, but it won’t create jobs, increase middle-class incomes or grow our economy.
“At the same time, President Trump and far-right Congressional Republicans are planning to cut taxes for those at the very top, they are pushing a budget plan that cuts funding for our schools and money for community economic development while endangering programs like Meals on Wheels which serves 100,000 seniors across our state,” he said. “Instead of going along with the extreme agenda of Congressional Republicans, President Trump should work on a bipartisan plan that helps middle-class families.”