It’s not hard to characterize American president Donald Trump’s tax plan as taking from the poor and giving to the rich. That’s what it does.
But it’s more insidious than that: the reforms would specifically hurt Democratic voters.
Megan McArdle writes for Bloomberg View that the plan (such as it is; many details have yet to be filled in) would punish two groups:
- The lowest-income Americans, who see their marginal tax rate go up from 10 to 12 percent and only get a small increase in the standard deduction in return.
- Upper-middle-class professionals in high-taxed blue states, who get creamed by the loss of their deduction for state and local taxes.
Benefits for the wealthy
People like Trump, by contrast, would get tax breaks all round.
The wealthiest Americans would benefit from the elimination of the estate (inheritance) tax as well as a reduction in the rate on business income. (Republicans will try to sell this as a “small-business” tax cut. Read Josh Barro in Business Insider on why that’s nonsense.)
Longstanding conservative policy goals — simplifying the tax code, shrinking the deficit — appear to have been forgotten.
As with health care, it turns out that now Republicans are finally able to govern, they don’t know how to.