Trump's tax proposal won't actually help the middle class. Here's what would.
President Trump campaigned on helping the little guy. His latest tax proposal, he says, is about helping the middle guy.
"It's a middle-class bill," Trump promised an audience of truckers last week.
Other administration officials and House Speaker Paul Ryan, R-Wis., have also claimed that their primary objective in reconfiguring the tax code is to help the middle class, not the wealthy.
Unfortunately, they seem to have gotten things backward.
In a preliminary analysis, the nonpartisan Tax Policy Center estimated that 80 percent of the proposed tax cuts would go to the top 1 percent of earners over the next decade. Meanwhile a quarter of households in the middle quintile would see their tax bills rise.
This should be no surprise, when you consider what's in the Republican framework.
It cuts the top personal income tax rate; eliminates estate taxes, which currently befall only estates worth at least $5.5 million; kills the alternative minimum tax; and slashes rates on pass-through income. The White House has lately even made the absurd claim that its enormous, unfunded corporate rate cuts are primarily about helping the middle class.
On Monday, the president's Council of Economic Advisers released a report claiming that corporate tax cuts would boost the average household's income by at least $4,000. This estimate relies on a series of assumptions that seem dubious at best, given other research (including one recently deleted paper by Treasury's own staff economists).
All this made me wonder: What would a tax plan that actually prioritizes the middle class look like?
Not much like the one Republican leadership cooked up, but it could still include elements appealing to both parties.