The Democrat Party can always scream “Tax Cuts for the Rich” whenever anyone proposes a reduction in the number tax brackets or amount paid in each bracket. The reason is simplicity itself. If the top 10-20% pay nearly all federal income taxes, then it stands to reason that any tax cut will favor them in sheer dollars returned to their pockets (see below).
There are many ways to look at the data. One could look at the charts and say that the top 20% are getting 51% of the income and then scream “income inequality” – a favorite Democrat Party stratagem. Still, does anyone expect a truck driver (my father was a truck driver) to make as much income as a radiologist (I am a radiologist). I know that he didn’t and that he worked very hard to secure my opportunity to earn much more than he did.
If “equality” is one’s mantra, one would want the data to indicate that one’s “share of total income” should “equal” one’s “share of the federal income taxes paid.” If that is the comparison, then the rich are really getting screwed
If you believe our tax code is a seven headed hydra that must be reformed because it squashes incentives to earn and invest (as I do) then the only question is, “How do we do it?”
I like Trump’s tax plan. It helps everyone and stimulates growth and job production. Below is an analysis by the National Center for Policy Analysis. As I noted, this can’t be done without top earners benefitting the most.
[Source: Trump’s Tax Plan Will Benefit All Income Groups, But the Most Benefits will Accrue to the Top Half of Income Earners, by Pamela Villarreal]
Presidential candidate Donald Trump has proposed a number of tax reforms in order to reduce tax burdens, simplify the tax code and boost economic growth.
Table I shows the amount of tax paid per person in each income decile. The effect of the Trump plan would be to lower taxes for every group. Averaged over the ten deciles, the tax burden would fall by 20.2 percent, with lower proportionate reductions in the lower-to-middle income deciles and higher than average proportionate cuts at the two ends of the income distribution. The reductions would be modest for the lowest quintiles in terms of dollar amounts, but those in the top half of the income distribution would receive an average tax break of $1,000 per person.
While these tax cuts (in dollars) tilt heavily toward the rich, it is important to note that the bottom two income groups would experience the largest percentage change in taxes paid. The tax burden for the poorest 10 percent would fall 150 percent, and the burden for the second poorest group would fall 375 percent!
,,, In terms of broadly measured income (includes adjusted gross income and then adds some tax-exempt sources of income and employer contributions to health insurance, among other adjustments):
- Net income for the bottom 10 percent of earners would rise 15.7 percent under dynamic analysis.
- On average, taxpayers would experience an increase of 15.7 percent in broad net income.
So there you have it. It is my opinion that the Tax Code must be revised to stimulate growth. It can’t be done without top earners gaining the most. This is due to 60 years of Democrats “taxing the rich disproportionately.” However, under the Trump Plan, the poor get the greatest percentage benefit, if not the largest dollar benefit.