President Trump has faced a big setback with the Republican health care bill biting the dust, and it appears as if he is keen to make up for it by pushing through the tax reforms that he promised during his campaign. It is now more of a desperate bid by the Republicans to score a win of some sort to mark the President's tenure in the office and post the healthcare reform debacle, the only opportunity they may have at hand could be the tax reform. However, dire predictions about what will happen if the tax reforms go down have already begun circulating, undermining the chance of complete support for any proposals that will be put forth.
Tax reforms could increase inequalities
This is the conclusion that's derived based on the Commitment to Reducing Inequality (CRI) Index. The CRI index, developed by the Development Finance International and Oxfam researchers, shows that America is already not doing very well in managing inequality issues efficiently. Researchers now believe that if the Trump tax reform comes into force, the gap between the affluent and the poor will only widen dramatically. As of now, in the index, the U.S. stands at 23rd place and researchers think that a new tax reform on the lines proposed by Trump would push it down 6 places. On tax policies, the U.S. will be on a lower level than countries like Peru, Sri Lanka, and Chile. It is interesting to see that Slovenia ranks higher than the U.S., at present, in terms of the overall ranking in the index, despite the fact that the U.S. is a far wealthier country.
Need for a progressive tax system
Many experts have been of the opinion that scrapping the Affordable Care Act could be a disastrous move because it would essentially leave millions without coverage. This would add to the inequality and what would only worsen the situation would be the tax reform that is proposed by the Republicans.
The experts are of the belief that a more progressive tax reform that reduces the tax burden on the lower income earners and accentuates labor laws is one that could benefit the nation's economy admirably and hasten development. In sync with these policies, the government will also have to focus on healthcare and social protection to give lower income earners a chance to bridge the gap.