Politics Poor Americans don't fare well under Trump's tax cut plan

13:20  07 october  2017
13:20  07 october  2017 Source:   Associated Press

The Trump Tax Cuts Are Going to Hurt the Republican Party

  The Trump Tax Cuts Are Going to Hurt the Republican Party They’re not doing this to win an election.In the wake of their failure to repeal Obamacare, Republicans embraced tax cuts as their political salvation. To the eternal party conviction that tax cuts would unleash wild prosperity, Republicans added the faith that it offered them political salvation. A signed tax cut would be “the difference between succeeding as a party and failing,” announced Senator Lindsey Graham. “It’s the difference between having a majority in 2018 or losing it. It’s the difference between one term and two.

Trump promised Americans “the largest tax cut in our country’s history,” but there’s not much in Trump ’ s plan to help more. They receive the tax credits in the form of a tax refund, even though they paid no taxes . Maag said this would not change under Trump ' s tax plan .

WASHINGTON – President Donald Trump promised Americans "the largest tax cut in our country's history." They receive the tax credits in the form of a tax refund, even though they paid no taxes . Maag said this would not change under Trump ' s tax plan .

In this Sept. 27, 2017 file photo, President Donald Trump speaks in Indianapolis. Trump promised Americans “the largest tax cut in our country’s history,” but there’s not much in Trump’s plan to help low-income households. One independent analysis says low-income families would save about $60 a year. Another says their incomes would go up less than 1 percent. Congressional Republicans say the critiques are premature because the plan is incomplete.(AP Photo/Michael Conroy)© The Associated Press In this Sept. 27, 2017 file photo, President Donald Trump speaks in Indianapolis. Trump promised Americans “the largest tax cut in our country’s history,” but there’s not much in Trump’s plan to help low-income households. One independent analysis says low-income families would save about $60 a year. Another says their incomes would go up less than 1 percent. Congressional Republicans say the critiques are premature because the plan is incomplete.(AP Photo/Michael Conroy)

WASHINGTON — President Donald Trump promised Americans "the largest tax cut in our country's history." But for low-income households, Trump's plan would amount to crumbs.

The Trump Tax Cuts Are Going to Hurt the Republican Party

  The Trump Tax Cuts Are Going to Hurt the Republican Party They’re not doing this to win an election.In the wake of their failure to repeal Obamacare, Republicans embraced tax cuts as their political salvation. To the eternal party conviction that tax cuts would unleash wild prosperity, Republicans added the faith that it offered them political salvation. A signed tax cut would be “the difference between succeeding as a party and failing,” announced Senator Lindsey Graham. “It’s the difference between having a majority in 2018 or losing it. It’s the difference between one term and two.

Trump promised Americans “the largest tax cut in our country’s history,” but there’s not much in Trump ’ s plan to help more. They receive the tax credits in the form of a tax refund, even though they paid no taxes . Maag said this would not change under Trump ' s tax plan .

Trump promised Americans “the largest tax cut in our country’s history,” but there’s not much in Trump ’ s plan to help more. They receive the tax credits in the form of a tax refund, even though they paid no taxes . Maag said this would not change under Trump ' s tax plan .

The poorest would get an average tax cut of about $60 a year, according to an analysis by the Tax Policy Center. Middle-income families would get about $300 on average.

"There's no significant benefit for low-income families," said Elaine Maag, a senior research associate at the Tax Policy Center. "It's important because when low-income families get money they tend to spend it, putting it right back into the economy. High-income families tend to save it."

Republicans have backed a budget resolution that would enable Congress to pass a tax package that could add up to $1.5 trillion to the national debt over the next decade.

The Tax Policy Center's analysis says most of the tax cuts would go to the wealthiest Americans. For example, the top 1 percent — families making about $700,000 a year — would get an average tax cut of $129,000. Tax breaks targeting the wealthy include lowering the top income tax rate from 39.6 percent to 35 percent, eliminating the alternative minimum tax, and doing away with the federal estate tax, which is only paid by people who inherit multimillion-dollar estates.

Move Over Chuck and Nancy. Trump Eyes New Democrats to Work With.

  Move Over Chuck and Nancy. Trump Eyes New Democrats to Work With. President Donald Trump's flirtation with Democratic leaders doesn't extend to his tax plan — Chuck Schumer and Nancy Pelosi hate it — but he might lure some Democrats.On Wednesday, Schumer joined other leading figures in his party in denouncing Trump's new tax plan as a giveaway to the wealthiest Americans. "This is 'wealth-fare,'" Schumer quipped on the Senate floor. "It's little more than an across-the-board tax cut for America's millionaires and billionaires.

Trump promised Americans “the largest tax cut in our country’s history,” but there’s not much in Trump ’ s plan to help more. They receive the tax credits in the form of a tax refund, even though they paid no taxes . Maag said this would not change under Trump ' s tax plan .

WASHINGTON — President Donald Trump promised Americans “the largest tax cut in our country’s history.”. But for low-income households, Trump ’ s plan would amount to crumbs. The poorest would get an average tax cut of about a year, according to an analysis by the Tax Policy Center.

Congressional Republicans dispute that their plan would ultimately help wealthy families more than it would help the middle class. They note that the plan unveiled by Trump and GOP leaders last week is incomplete. The plan would reduce the number of tax brackets from seven to three, but it doesn't include the income levels for each tax bracket.

The plan would also increase the $1,000 child tax credit, but it doesn't say by how much. Those details are still being worked on.

"There is simply no way for TPC or anyone to deliver these kinds of specific estimates with the information provided in the framework," said Sen. Orrin Hatch, R-Utah.

"To get their estimates, they filled in blanks with numbers from other proposals, added a pile of exceptionally pessimistic and biased economic assumptions, and came up with a tax plan that, for all intents and purposes, is their own," said Hatch, who chairs the Senate Finance Committee.

How tax-cut plan could benefit Trump and wealthy staffers

  How tax-cut plan could benefit Trump and wealthy staffers The White House insisted Thursday that the tax cuts President Donald Trump has proposed wouldn't benefit the rich. But the blueprint suggests that wealthy Americans, including several in Trump's administration, would likely enjoy a financial windfall. Much of their income tends to come from investments and business profits, which stand to benefit from the proposed tax changes.The president's claim that rich Americans like him would actually pay more under his plan rests largely on how he's keeping score of a plan still short on key specifics.

Trump promised Americans “the largest tax cut in our country’s history,” but there’s not much in Trump ’ s plan to help more. They receive the tax credits in the form of a tax refund, even though they paid no taxes . Maag said this would not change under Trump ' s tax plan .

Associated Press. Saturday, Oct. 7, 2017 | 2 a.m. WASHINGTON — President Donald Trump promised Americans "the largest tax cut in our country's history.". But for low-income households, Trump ' s plan would amount to crumbs.

The Tax Policy Center says it filled in the blanks by taking numbers from a tax blueprint released by House Republicans. For example, the analysis assumes that the child tax credit would increase to $1,500.

Republican Sens. Marco Rubio of Florida and Mike Lee of Utah want to increase the child tax credit to $2,000. Rubio says doubling the credit is the best way to target tax relief for low- and middle-income families.

The main provisions that would affect low-income families are increasing the child tax credit and raising the standard deduction from $6,300 to $12,000. This would be partially offset by eliminating the $4,050 personal exemption.

Also, the lowest tax rate would increase from 10 percent to 12 percent, but the plan doesn't specify the income levels for each tax bracket.

In the Tax Policy Center's analysis, low-income families make less than $25,000 a year. That puts them in the bottom 20 percent of households.

An analysis by the conservative Tax Foundation noted the plan's lack of details. Nevertheless, it found only modest benefits for low-income families, increasing their annual incomes by an average of less than 1 percent.

On Tax Overhaul, Public Support Hard to Find

  On Tax Overhaul, Public Support Hard to Find Despite the enthusiasm for overhauling the tax code among Republican congressional leaders and President Donald Trump, the public is hardly sold that the effort is a priority or on the possible benefits. Nearly one-third of U.S. adults surveyed in this week’s Economist/YouGov poll strongly oppose the GOP tax framework released last week, and  nearly the same amount believe their own taxes would stay the same under the plan.

WASHINGTON — President Donald Trump promised Americans "the largest tax cut in our country's history.". But for low-income households, Trump ' s plan would amount to crumbs. The poorest would get an average tax cut of about a year, according to an analysis by the Tax Policy Center.

Trump promised Americans "the largest tax cut in our country's history," but there's not much in Trump ' s plan to help low-income households. They receive the tax credits in the form of a tax refund, even though they paid no taxes . Maag said this would not change under Trump ’ s tax plan .

The liberal Center for Budget and Policy Priorities argues that if adding to the national debt leads to spending cuts, low-income families could be worse off.

"By increasing deficits and debt, the tax cuts would intensify pressure, likely in the next several years, for steep budget cuts in programs that help low- and middle-income families," wrote Sharon Parrott, a senior fellow at the center. "Most low- and middle-income children and their families would likely lose more from these budget cuts than they would gain from the tax cuts."

One reason the poorest families wouldn't get much of a tax break is that many don't pay federal income taxes. About 44 percent of U.S. households pay no federal income tax, according to the Tax Policy Center. Most of these people pay other federal taxes, including payroll taxes.

However, when it comes to the income tax, most low-income families receive tax credits that are greater than the amount of taxes they owe. They receive the tax credits in the form of a tax refund, even though they paid no taxes.

Maag said this would not change under Trump's tax plan.

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Follow Stephen Ohlemacher on Twitter at http://twitter.com/stephenatap

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