Tax Cuts for the Wealthy

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This is a collaborative knowledge base; feel free to propose edits/additions that you believe are important for others to know. Contributions will be reviewed and approved based on quality and accuracy.

Recent Updates[edit]

  • 2/23/2017: A memo from the White House budget office suggests that the Trump administration may cut federal programs for poor and working-class Americans, which could lead to a transfer of funds from low-income families and children toward wealthier older Americans. [1]
  • 2/22/2017: A report by the Pew Charitable Trusts found that most states do not have estimates of the costs of tax credits, deductions and exemptions for saving and paying for college. These tax benefits save families and individuals billions of dollars, but there is no clear evaluation of their impact on state budgets or higher education. [2]

Actions Taken by the Federal Government[edit]

Legislative Actions[edit]

Legislation that Supports Equity and Justice

Harmful Legislation


See also the State and Local Pages for state-by-state legislative tracking.


Executive / Administrative Actions[edit]

How You Can Resist[edit]


Projected Impact[edit]

Who Benefits[edit]

The people who will receive a tax cut under Trump's tax plan are disproportionately wealthy:[3]

  • Top .1% will receive a tax cut of $1.3 million
  • Top 1% will receive a tax cut of $214,000
  • Top 20% will receive a tax cut of $16,660

Who Is Harmed[edit]

  • People who will receive a tax increase under Trump's plan are disproportionately people of color and single-parent households:[4]
    • 51% of single parent households
    • 8% of married households filing jointly
    • 32% of black households
    • 24% of Hispanic or Latino households
    • 19% of white non-Hispanic households
  • Trump's tax plan would cut discretionary spending - where most programs for poor families come from - from 6.3 percent of the economy now to 5.3 percent in 2027 (the smallest level since 1962).[5]
  • Trump's plan to repeal the inheritance tax would make wealth inequality worse in America.[6]

Trump/GOP Strategy[edit]

  • Trump and the GOP Congress plan to change the tax code to dramatically cut taxes for the wealthy and increase taxes disproportionately on single-parent households and people of color.[7]
  • Trump has also proposed to repeal the inheritance tax (known as the "death tax"), which imposes a 40% inheritance tax on personal estates worth more than $5.45m and joint estates of $10.9m—which will only benefit the richest 0.2% of Americans.[8]
  • Trump and the GOP Congress have indicated that they will use Budget Reconciliation to pass these tax reforms in 2017.[9]
  • Trump and GOP Congress also plan to use Budget Reconciliation to repeal Obamacare, which would result in a huge tax cut for the wealthy because the law currently uses a tax increase on the top 1% to provide subsidies for low-income people who didn't qualify for Medicaid and bought insurance on the exchanges.[10].
  • Trump's budget office has implied that it will cut the Legal Services Corporation, which helps the poor get access to lawyers, the Appalachian Regional Commission, which helps develop economies developments in Appalachia as well as AmeriCorps, a program that puts volunteers into poor communities. Finally, the Neighborhood Reinvestment Corporation, a nonprofit organization focused on economic development in cities would see cuts.[11]

Vulnerabilities in Their Strategy[edit]

  • There are currently 52 Republican US Senators. If all Democrats vote against a tax reform package under Budget Reconciliation, it will take at least three Republicans to join them to stop it from being passed. There is considerable disagreement among Republicans over the details of tax reform, which may make it difficult to muster the near-unanimous vote required to pass tax reform without Democratic support.[12]. For example, Senate Majority Leader Mitch McConnell said he prefers a “revenue-neutral” tax package—meaning it would neither add to nor subtract from the deficit[13]—while the plans offered by Trump and Paul Ryan would substantially increase the deficit.
  • According to FiveThirtyEight.com, the Republican Senators most likely[14] to oppose Trump are Susan Collins (Maine); John McCain (Arizona); Rand Paul (Kentucky); Rob Portman (Ohio); and Lisa Murkowski (Alaska).
  • On average, states with Republican leadership are more dependent on the federal government for funds than are Democratic states.[15]

Source

  • Seeing how many state legislators lost their seats as a result of effects of the same type of tax policy Trump is proposing may make Republicans in Congress nervous from following his plan. In Kansas, Governor Sam Brownback experimented with a strict conservative economic policy by trying to phase out the income tax entirely over time and replacing it with taxes on consumption.It began with an exemption to 330,000 small business owners from paying income taxes. However, tax revenues dropped significantly immediately. They dropped too fast for legislators to respond with spending cuts because income tax accounted for 50 percent of the state's revenue. As a result, there were tax cuts to core state functions like education and the upkeep of roads and bridges. Many state legislators lost their seats as a result of this policymaking.[16]

Past Updates[edit]

  • 02/09/2017: Treasury Secretary Steve Mnuchin has said that “there would be no absolute tax cut for the upper class.” However, the Tax Policy Center analyzed both the president’s and the House Republicans’ plans and found that the wealthy will receive the largest tax cuts by far.[17]
  • 02/02/2017: House Majority Leader Paul Ryan announced that the GOP does not plan to officially take up a tax bill until the spring, pushing projections for a signed tax cut bill to August of this year.[18]