President Donald Trump and Republican leaders in Congress released their new tax plan. AFL-CIO President Richard Trumka responded to the proposal:
The tax plan Republicans put out [yesterday] is nothing but a con game, and working people are the ones they’re trying to con. Here we go again. First comes the promise that tax giveaways for the wealthy and big corporations will trickle down to the rest of us. Then comes the promise that tax cuts will pay for themselves. Then comes the promise that they want to stop offshoring. And finally, we find out none of these things is true, and the people responsible for wasting trillions of dollars on tax giveaways to the rich tell us we have no choice but to cut Medicaid, Medicare, Social Security, education and infrastructure. There always seems to be plenty of money for millionaires and big corporations but never enough money to do anything for working people.
Here are some of the terrible proposals included in yesterday’s plan:
- Allowing multinational corporations to pay little to nothing on their offshore profits, which would be a giant tax break for sending jobs overseas and a giant loophole for corporations to avoid paying taxes.
- Eliminating the estate tax, which would benefit only the wealthiest 0.2% of estates, those worth more than $5.5 million.
- Eliminating the alternative minimum tax, which helps keep the wealthy from exploiting loopholes to avoid paying taxes.
- Reducing the top individual tax rate from 39.6% to 35%, which would mainly benefit the rich.
- Reducing the top individual tax rate for business owners from 39.6% to 25%, which would mainly benefit Wall Street hedge fund managers, real estate developers and law firms.
- Reducing the corporate tax rate from 35% to 20%, which would overwhelmingly benefit the rich.
- Increasing the bottom tax bracket from 10% to 12%.
- Eliminating the tax deduction for state and local taxes, which would punish states that make the kind of investments that boost economic growth for the whole country.
We already know that Trump and Republican leaders in Congress want working people to pay the price for these tax giveaways to big corporations and the wealthy. We know this because the budgets they have proposed for the coming year include trillions of dollars in cuts to Medicaid, Medicare, Social Security, education, infrastructure and other programs benefiting working people.
This is what a tax plan that actually works for working people looks like. It has three overarching principles. First, Wall Street, big corporations and the wealthy must pay their fair share of taxes. Second, tax reform must raise enough additional revenue now and in the future to create good jobs and make the public investment we need in infrastructure, education, and meeting the needs of children, families, seniors and our communities. Third, tax reform must eliminate all tax incentives for corporations to shift jobs and profits offshore.
Unfortunately, the tax plan unveiled yesterday goes in the exact opposite direction. It does not even qualify as "tax reform." It’s just tax cuts for rich people.