Trump tax reform in a nutshell

  • The big picture goal is to stimulate economic growth from 2% to 3%.
  • The overall long term impact and new debt left to our children cannot yet be estimated.
  • Big question #1: Is a 1% increase in economic growth worth the trillions in immediate cost to public funding?
  • The rich benefit the most. It is the largest tax cut for the wealthy in our lifetime. The Trump family saves $4 Billion in taxes.
  • Big question #2: Does America want to make its wealthy even wealthier?
  • Tax rates are inverted. That means the wealthiest will have an effective marginal tax rate of 15% while most of us working class people will pay a marginal tax rate of 25%.
  • Big question #3: Is it good public policy to tax ordinary people at higher rate than the wealthy?
  • There are no changes to encourage long term savings and investment by working class people. This has historically been a cornerstone of Republican tax policy.
  • Big question #4: Do we want tax reform to primarily address the wealthy?
  • There will be no simplification. New rules necessary will offset the regulations eliminated.

My gut feeling based on past readings is that job creation will not be boosted by tax cuts as much as politicians hope. If that is true then tax cuts need to be evaluated on face value. My own opinions are clear. Making the wealthiest more wealthy is not healthy for our society.

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