TRUMP’S “GREATEST TAX REFORM OF HISTORY” – A WINDFALL FOR MILLIONAIRES AND CORPORATIONS
By Conrad Schuhler
[This short article published on April 27, 2017 is translated from the German on the Internet, https://isw-muenschen.de
This is the “greatest tax cut and the greatest tax reform in history,” declared US Treasury secretary Steven Mnuchin in presenting the Trumpian tax reform. The top economic advisor Gary Cohn stood at his side. In fact, this was the greatest tax cut for these gentlemen, both bankers at Goldman Sachs and for the billionaire businessman Trump. The top tax rate for income taxes should fall from 39.6% to 35% and the corporate tax rate from 36 to 15%. The inheritance tax should be completely abolished.
This tax system is tailored for millionaires. The top tax rate only affects households with an income of more than $470,000. Thus the taxes fall the most with those receiving the highest incomes. Cancellation of the inheritance tax enables millionaires and billionaires to pass on their wealth tax-free.
Corporations will enjoy the most enormous advantage, according to the calculations of the tax committee of the US Congress, the drastic reduction of the corporate tax will lead to lower tax revenues of $2 trillion in 10 years. The “trickle-down” effect is advanced as an argument as with Ronald Reagan. The tax cut for businesses will supposedly le4ad to special growth effects so mass income and tax revenue will increase. The research
service of Congress also refuted this thesis long ago. Both Reagan and George W. Bush lowered the corporate tax. For both, the mass income stagnated and the income disparities grew larger. Both left behind gigantic budget deficits.
This time there will be either an immense increase of state debts that the majority in Congress will not accept or massive cuts in the social programs.
The commentary of the “New York Times” hits the core: “This is not fiscal policy but a robbery led by Trump.”
“Deep Voodoo: Review of The Big Con,” Roger Lowenstein, September 23, 2007 http://www.nytimes.com/2007/09/23/books/review/Lowenstein-t.html
“Laffer curve,” Wikipedia https://en.wikipedia.org/wiki/Laffer_curve
“The Laffer Swerve,” Paul Krugman, April 10, 2015 https://krugman.blogs.nytimes.com/2015/04/10/the-laffer-swerve/
Project on Government Oversight (POGO) http://pogo.org/
“Trickle-down Economics,” Wikipedia https://en.wikipedia.org/wiki/Trickle-down_economics