Donald Trump’s new tax plan has been heavily criticised by multipe tax experts. Whilst the President used helping small businesses as a guise for the plan, it could actually be used to save him millions of dollars.
Trump would not be the only billionarie to benefit from the “biggest tax cut” in US history, the US President would be alongside hundreds of other owner-operated entities.
“The biggest winners: Donald Trump, Ivanka Trump, Jared Kushner… and all the other billionaires Trump brought into his administration,” wrote Robert Reich, a former US Labour Secretary and Professor of Public Policy at the University of California, on Twitter.
According to Chuck Marr, director of federal tax policy at the nonprofit Center on Budget and Policy Priorities, the new tax plan would give the 400 highest-income households a tax break of about $9 million each per year.
“The small business is the poster child,” Marr said. “The same with the estate tax; they hold up a farmer when no farmers are affected. Because a farmer’s sympathetic and the Walton family’s not.
“The [media] coverage ignores, though, that most small businesses are small. You have a graduated rate structure. So if you don’t make much money, you don’t pay a high rate.
“Seventy percent of entities with pass-through income already pay 15%. So this doesn’t affect them. It only affects those who are at the higher rates. And that money, again, is very concentrated at the top.”
Co-founder of the nonpartisan Center for Economic and Policy Research, Dean Baker, has estimated that the plan would save Donald Trump $65 million a year in taxes.
“This is a classic kind of shell game; this is done all the time in political circles,” Baker said.
“The reality is it does very little for small businesses – in most cases it does nothing for them, because they’re already paying taxes at a lower rate. So this is a way of cutting taxes for the very wealthy but hiding it as helping small businesses.”
Trump’s chief economic adviser, Gary Cohn said: “We are going to cut taxes for businesses to make them competitive and we’re going to cut taxes for the American people, especially low- and middle-income families,”