With the introduction of President Trump’s proposed tax reform, controversy has arisen over how the plan will affect the United States population. According to Annenberg Public Policy Center of the University of Pennsylvania, "For the highest earners -- those in the top 1 percent and top 0.1 percent -- nearly all would see lower taxes." While earners in the top 1% may see tax cuts of near $200,000, middle class households would see tax breaks “on average of “$660, or 1.2% of their after-tax income.” Not only is this tax cut for middle income households relatively minute in absolute terms when compared to the tax breaks received by the upper 1%, but it is reported that "By 2027, more than one of every four middle-income families would pay more in taxes." Essentially, while the upper class sees large tax breaks, as well as corporations with the tax rate changing from 35% to 20%, the middle class receives virtually insignificant tax breaks, which will be replaced by even higher taxes within 10 years. Lastly, the lower class loses when it comes to Trump’s new tax plan, as significant cuts to funding for
1) How do you think Trump's tax plan will be perceived by congress?
2) To what extent do you think the plan will affect funding for social programs?
3) How will the plan affect the national debt?
1. Considering what the tax plan entails, I would imagine it unlikely that the bill ever be passed as it stands now. However, if I'm not mistaken, the plan did pass in the House already and is still in hands of a Senate committee being rewritten as we speak. What I expect is a much watered down version of the proposal, with the Senate and House passing their own versions. If they do end up passing it as it stands, I suspect there would be some issues for the GOP and Congress as a whole. So far, the only comments that I've heard regarding the tax plan are negative, hypocritical in particular. The very basis of support that Trump has underneath him would get slammed by the new tax plan while the 1% would unfortunately slip away improved. It is for this reason that I think Congress will eventually try and fight the tax plan at a specific stage of its development. If not, then the loyal basis of both Trump and the Republican Party may see a very sharp decline soon thereafter.
ReplyDelete2. I think that it is difficult for social programs to be cut significantly. After Britain established welfare and other social programs, many fiscal conservatives bemoaned the winds of political change and remarked that "once you give the people something, it is impossible to take it away". Similarly, trump knows that attacking Medicaid, Medicare, and all the other big government spenders is going to make his popularity take a hit. Instead, he can appease both the rich and the poor by borrowing money indiscriminately, pushing the problem to further generations.
ReplyDelete1. Trump's and McConnell's tax plan as it is now will be perceived by Congress the same way that every other ridiculous idea that Trump thinks of is perceived: with a lack of seriousness and a lack of support. 80% of this tax cut would benefit the top 1% by the 10th year of the plan and the middle class would have minimal tax cuts, and all of this is funded through cutting Medicaid and Medicare. It is obvious that 100% of the 100 senators would have a majority constituency that would be against the plan. In fact, the CNN poll released that 24% of Americans would benefit from Trump's proposed tax plan while 31% say it would be harmful.
ReplyDeleteEven assuming that the tax plan would be at least somewhat reasonable and well-thought through, it would still be tough to pass in Congress. Under the 115th Congress, there are 52 Republican seats and 46 Democratic seats. Of course, since it is a tax break after all, there would be a lot of support from the 52 Republican seats and very minimal support from the Democrats.
What may end up happening is that since the tax break right now is only a blueprint, it will be changed and adopted to make it more reasonable and minimize its effect on the unacceptable deficit levels.
Never mind guys-- I was totally wrong. 12/2/17
Delete3. This tax plan, if passed, would have huge and extremely troubling implications for the American economy. The deficit would surely rise, and any positive impact that has been incurred on the economy during Trump's term would be undone. A plan such as this could even put America in a significantly worse debt than it already is. The reasoning behind the tax plan, specifically behind lowering the rates of the 1% and corporations so much, rests on two main points: the lowered taxes would attract increased investment and spur additional growth, and the improved revenue would equate to better wages for the average employee. This, in my opinion, put far too much faith in corporations. While some companies might actually value their employees enough to raise wages, many less sentimental companies would not be as inclined. The gained activity, according to an article by Paul Krugman, would like come from foreign investment. This wave of investment would most likely inflate the dollar and some forecasts have it leading to a 6 trillion dollar trade deficit over the next decade. This tax plan certainly does not bode well for the long term health of American economy.
ReplyDelete2. This proposed plan would be devastating to social programs. It claims to cut "over $1 trillion from Medicaid over the next decade". As we have already learned, the US is graying, so the number of people over 70 is steadily increasing, and fast. With even more people aging into the Medicaid and Medicare range, we should be saving money and increasing taxes to accommodate this larger population, not cut funds from it.
ReplyDelete3) As with almost all tax cuts comes an increase in debt. The United States has a large government that needs funding to operate and when we don't get enough money through taxes, we tend to borrow money. The current US debt is around 20 trillion dollars, which has never really been seen before now. Economists are still unsure of what the debt will really do to our economy and financial systems. Even with the uncertainty it is a common knowledge that you don't want to be in debt, so I believe that this tax cut is overall bad for America.
ReplyDelete3. I think that because this plan includes tax cuts, this means it will increase the national debt. This could put America in even deeper debt that we already are
ReplyDelete1. Because Congress is controlled by the Republicans currently, I believe that the tax plan will be received relatively well but will have some changes made to it. Because of this, it will become more watered down but ultimately the bill will be passed. This will have some major implications once this occurs, not just for those who the new bill affects but also for which party will have control of Congress in the coming years.
ReplyDeleteThis tax plan will be met with an immediate increase in the deficit. Sure, the taxes on the working class will eventually rise back to a higher level, but the effect on our national debt will be practically irreparable with our fiscal habits. Right now, it's hard to see if the tax cuts are beneficial, or if they will increase revenue overall. I personally believe that cutting taxes is a direct indication that the government is losing money, and digging deeper into debt.
ReplyDelete1. I'm sure there will be a large uproar from the Democrats however, many of the Republicans are just going to get pork barrel money and stick to their party lines. When they have such a majority in the house and senate they are not going to have to debate or fight much over this concept. No matter how unjust it is or unjustified they will just stay to their lines and it will be end of story. I'm sure that most of the democrats will stall as long as possible and make some way of trying to come back on this but it will be passed at the end of the day.
ReplyDelete2. trumps new tax plan will greatly affect the funding of social programs. Social programs already struggle from the lack of funding that they receive versus what they deal out to people. Some of the reforms that politicians are looking at is making the retirement age higher or making stricter guidelines. But with Trumps cuts to the social programs they are going to struggle even more maybe even just be cut for good.
ReplyDelete2. While the new tax plan will cause social programs to struggle even more than they already are, Trump will make sure they stay afloat. Those receiving benefits will cry out if the programs get cut. Like Diego mentioned, once you give something to the people it's harder to take it away. However, they will take a hit. His tax plan is definitely not doing anything to fix the declining programs, so they will drag on inefficiently for now.
ReplyDelete2. I do not think the plan will have a very big affect on social programs. In today's world, it is extremely difficult to take out of place a program that applies to and benefits to many people. It will be utter chaos if he threatens to take these out and the people will stand up for what they want when and if the time comes
ReplyDelete3. Since his plan involves cutting taxes, the national debt will rise. Unless you're reducing expenditures, cutting taxes will not decrease debt. However, even then, cutting taxes simply is not the best thing for the debt. Cutting taxes would work if the tax rate was 90%, but it isn't.
ReplyDelete