After yet another attempt to repeal the Affordable Care Act [VIDEO] failed in the Senate, Republicans in Congress have shifted gears to focus on tax reform. Last Wednesday, at a rally in Indiana, #President Trump introduced his new tax plan claiming it helps the middle class and would in no way benefit the wealthy. Trump even boasted that he would not personally gain from this tax proposal when he told the audience, "I'm doing the right thing. And it's not good for me, believe me." The President’s statements regarding the tax plan were echoed by his economic advisor, Gary Cohn during an interview with ABC’s George Stephanopoulos, and again by House Speaker, Paul Ryan who appeared on Fox News with Sean Hannity.

Advertisements
Advertisements

False claims

Upon closer inspection by several independent tax experts, including the non-profit Washington-based Tax Policy Center, many claims made by Republicans and Trump himself are utterly false [VIDEO]. According to the Tax Policy Center, the wealthiest Americans will see their tax rate lowered from 39.6 percent to 35 percent. The Washington Post reported the proposal also features massive cuts to corporate taxes, the elimination of the estate tax, and the termination of the #Alternative Minimum Tax which was put in place to ensure the richest Americans paid their fair share by reducing their deductions.

Trump himself stands to save an astronomical amount of money on this deal in its current form. According to The Washington Post, Trump stands to save well over a billion dollars on the elimination of the estate tax alone.

Advertisements

Ending the alternative minimum tax (AMT) could also save the president tens of millions. Trump has famously refused to release his tax returns, but his 2005 filing, which went public earlier this year, showing he paid around $38 million in taxes, $31 million of which was due to limited deductions from the AMT.

We have seen this before

The latest Republican tax plan harkens back to an equivalent situation that happened in Kansas just a few years ago. According to NPR, when Republican Governor Sam Brownback successfully passed an eerily similar tax plan through Kansas' State Legislature in 2012, he promised the proposal would greatly benefit Kansas' economy. He ended up being dead wrong about his promise. Kansas nearly went bankrupt, and Brownback had to borrow a billion dollars as well as eliminate infrastructure projects and take from the education budget. The Kansas debacle has stoked fears that the GOP’s tax proposal could produce the same results but on a much larger scale.

Who pays for this?

According to Reuters, Trump's tax plan will lower taxes in one form or another for nearly every American to the tune of $5.99 trillion and reduces federal income by around $2.4 trillion throughout the next decade.

Advertisements

As of now, it is unclear how Republicans plan to make up the difference without adding more to America's already out-of-control debt. Top Democratic leaders such as Senate Minority Leader Chuck Schumer are growing increasingly concerned about Trump's proposal. Schumer vented his fears in a recent statement, saying, "The Senate Republican budget is the clearest sign yet that Republicans are intent on pursuing a tax plan that would blow a huge hole in the deficit and stack up debt, leading to cuts in programs that middle-class Americans rely on."

Currently, the proposed #Tax Cut is in its infancy with many possible changes still to come. What we do know, as reported by The Atlantic, is the Republicans are planning to attack this proposal with the same strategy they used with health care -- by trying to push it through with a simple majority without any bipartisan input. Tax reform would be a massive victory for the Trump administration which has yet to pass any major legislation. But a victory could be to Trump's detriment as this tax plan, at least in its current form, goes against the populist message Trump touted on the campaign trail. Trump’s desperation for a win could end up angering his base, as well as the majority of Americans who don’t want to see rich people get another tax cut.