President Trump claims tax cuts will benefit the Middle Class Americans

09-28-2017Tax Information

Is President Donald Trump’s statement earlier this month that “the rich will not be gaining at all with this (proposed tax) plan” true?  Will the middle class benefit?


President Trump is looking to overhaul the tax code.  He made remarks prior to a September 13 meeting with members from both parties of Congress.  The president said he wanted to cut the corporate tax rate from 35 percent to 15 percent and lower individual income taxes.

In April, the one-page “detailed” proposal from the White House included:

  • Abolish the estate tax.  (This only affects individuals with assets worth more than $5.5 million; or couples with $11 million).
  • Cut the corporate tax from 35 percent to 15 percent.  (The non-partisan Congressional Budget Office estimates that 75 percent of the corporate tax burden falls on investors.)
  • Abolish the alternative minimum tax.  (This tax is designed to ensure that the wealthiest taxpayers pay a minimum tax).
  • Collapse the seven income tax brackets, which range from 10%-39.6% to three brackets (10%, 25% and 35%).

The non-partisan Tax Policy Center estimates that middle-income households (earning between $50,000 and $86,000) would see an average tax cut of about $1,900 or 3%.  The top 1% of households (earning over $732,000) would get an average tax cut of $270,000 or nearly 18%, and the top 0.1 percent would see a 20 % tax cut.
What the tax cut proposal fails to address is how the government will deal with reduced revenue.