“It would probably work out to be a significant shift in the distribution of the tax code.”
One major reason is Mr. Trump’s idea to allow the income of owner-operated companies, including his real estate concern, hedge funds
and large partnerships, to be taxed at a 15 percent rate — the same rate corporations would pay under his plan — rather than at the individual income tax rate, which now tops out at 39.6 percent and would be set at 35 percent by Mr. Trump.
“It is hard to know what the overall effects would be, but a plan
that is intended to reduce taxes on business income and investment income is going to provide substantial benefits to wealthier individuals, and the bulk of the benefits in this plan would go to them,” said Ed Lorenzen, a senior adviser for the nonpartisan Committee for a Responsible Federal Budget, a fiscal policy education group.
Still, it seems almost inevitable that the blueprint, should it eventually yield legislation, would violate the vow Steven Mnuchin, the Treasury secretary, made
that the administration would provide “no absolute tax cut for the upper class.”
That axiom, uttered by Mr. Mnuchin in November and quickly named the “Mnuchin rule” by skeptical Democrats, was based on his insistence
that any tax reductions at the top would be matched by the elimination of deductions and loopholes.
Trump Tax Plan Would Shift Trillions From U. S. Coffers to the Richest -
By JULIE HIRSCHFELD DAVIS and PATRICIA COHENAPRIL 27, 2017
WASHINGTON — President Trump’s proposal to slash individual and business taxes and erase a surtax
that funds the Affordable Care Act would amount to a multitrillion-dollar shift from federal coffers to America’s richest families and their heirs, setting up a politically fraught battle over how best to use the government’s already strained resources.
There is no way to know how the mathematics of the proposal would work, since the White House offered no cost estimates, no detail about which incomes would be taxed at what levels and no information about tax deductions or other breaks
that might be eliminated to make up for the lost revenue.
