Why do Americans think the GOP tax reform will benefit them?
The Trump administration is finally seeing some success in its push to get its tax reform passed. Throughout November, the GOP tax plan made its way through the US House of Representatives, Senate Finance Committee and the Senate Budget Committee. The vote hit a bump this week after the Joint Committee on Taxation, a nonpartisan body, ruled that the reform will bring economic growth of just 0.8% over the next decade, adding a further $1 trillion to the deficit. (Congressional Budget Office puts the number at $1.5 trillion.) While President Donald Trump claims that the policy will provide “tremendous” economic growth, with GDP expansion of up to 6%, it’s not clear exactly how Americans will be affected by the proposed tax breaks. Even Trump’s treasury secretary, Steven Mnuchin, referred to the projected economic growth as “optimistic.”
Although the Republican tax reform has proposed questionable terms (Senator Bernie Sanders has called it “Robin Hood in reverse“) and is projected to expand the federal debt, many view the plan as being good for businesses. This reform holds great importance to Americans, considering it was rated as the number one concern for small business owners. Small businesses are attracted by the slight tax relief in the new proposal, but it will be those who are making the most that will also benefit the most from it. As it stands, currently the top 20% of US households receive more than 80% of all the money the government pays through tax deduction. For some tax breaks, like capital gains, the number is over 90%.
These tax giveaways create a major misconception amongst Americans: While people see small benefits in getting some of their money back, the plan disproportionately favors the better-off. Under the Trump’s administration tax plan, the rich will continue to benefit from tax breaks the most, perpetuating what Christopher Faricy has termed welfare for the wealthy. Vice News investigates these handouts to the rich.
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