In fact, if the GOP tax plan becomes law, we may be looking at a future where our 1,600 richest hold more wealth than the nation’s entire middle class.
Trump Tax Plan: Helping the Middle Class Only Where They Don’t Need It
If President Trump has such concern for middle-income Americans, why is he so focused on the one area – federal income taxes – where they’re not getting absolutely clobbered?
Blogging Our Great Divide
November 01, 2017
by Bob Lord
Donald Trump has stressed repeatedly how his tax plan is intended above all else to help middle-income Americans.
In a television appearance, his assistant Treasury Secretary, Tony Sayegh confirmed this: “There is something that is absolutely certain,” Sayegh said. “And that’s the middle-income hard-working family is the focus of the president’s agenda when it comes to the individual side of tax cuts.”
Well, you can’t get more “middle-income” than the median household income of $57,616. When you do the math, using only the standard deduction, a family of four making $57,616 in 2017 should pay no more than $3,375 and only $1,375 if both children are under 17. Their effective tax rate would be between 2.4% and 5.8%.
Which makes you wonder: If President Trump has such concern for middle-income Americans, why is he so focused on the one area – federal income taxes – where they’re not getting absolutely clobbered.
Why didn’t he focus on employment taxes (Social Security and Medicare) instead? On that front, middle-income Americans face a stated effective rate of 7.65% of their wages, more than double the effective employment tax rate of their fellow countrymen in the top one percent.
Treasury Department assistant secretary of public affairs Tony Sayegh on what the Trump tax reform plan may look like.
Middle-income Americans are not squeezed only on the employment taxes nominally charged to them. They also bear the ultimate cost of the employment taxes paid by their employers, which also happen to be 7.65% for middle-income Americans. The employer’s share of federal employment tax is a cost of employment. Reduce it, and there’s more available to pay workers. If President Trump’s purpose in cutting the corporate income tax was to increase wages and create jobs for middle-income Americans, why didn’t he instead cut the employer share of employment taxes?
When you add them up, there are $8,815 in employment taxes paid on that median-income family’s wages, but Trump chose instead to focus on their measly income tax bill.
And why didn’t President Trump focus instead on the myriad other costs that are truly clobbering middle-income Americans? College expenses, as a percentage of middle-class incomes, have skyrocketed over the past several decades. While that median-income family of four faces an annual federal income tax bill of $3,375 or less, the cost of sending Junior to college, even at State U, is likely to be six times that much, or higher.
Or what about early childhood education? Children from median income families are at a disadvantage compared to their upper-class peers because their education starts later in life. Why not focus on making early childhood education affordable for all families?
That bottom line: If President Trump’s goal is to help middle-income Americans, the federal income tax was about the least likely path to get him there.
Which raises the question: What’s his real goal?