Trump’s Proposed Tax Plan Not As Middle Income Friendly As Hoped

Many people do not pay federal taxes, some because of limited income, some because of no income at all. To erase or ease the liability on the taxes that they pay (or are expected to do so), they get tax breaks. Donald Trump had advocated, during his campaigns that he would cut tax structures so that the average American household does not have to be bogged down with high taxes. The objective is to ensure that the high earners pay their dues while people without jobs or on welfare do not struggle by taking loans to pay income taxes. Actually, everyone does pay excise tax for gasoline, cigarettes or alcohol in addition to property taxes and other service related taxes too.

However while Trump’s campaign promises to cut taxes went a long way towards winning him the election, his proposals as they stand could see the tax bill for as many as 8 million middle income American households actually rise. This is all in contrast to the estimated 13% tax break that the top 1% are expected to enjoy under the Trump presidency. It also runs contrary to the narrative of the president elect’s statements made publically and most recent in the document his staff have released, called the “Contract with the American voter”

While some of the proposed changes to the tax code would also benefit the poorest sections of the income tax paying workforce the benefits are not expected to match the drawbacks of other changes. Single parents and couples with more than three children will likely feel the sting worst, particularly those family units which fall into the lower end of the income spectrum.

A key factor in this are the changes that have been proposed to tax deductions. By increasing the, more than doubling the standard deduction to around $15,000 but entirely eliminating many other deductions, some Americans could see their taxable income, and the tax paid thereon, rise by a significant amount. This is of course, still early days. Donald Trump has not even taken office yet, and many of his plans could be revised or throw out completely in that time. Congress would also have to approve the changes to the tax code.

In an ironic twist, many of those low and middle income Americans who supported Trump’s populist campaign will be coming out worse off, at least in terms of their tax bill, if Trump’s tax plan were to be adopted in its current form.

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