The voices of Tax Policy Center's researchers and staff
Donald Trump unveiled his tax plan—is it going to “cost him a fortune?” He has a tax cut for nearly everybody, but the highest income households would likely be the biggest beneficiaries. And his plan would likely add trillions to the national debt over the next decade, concludes TPC’s Howard Gleckman. But while Trump details his tax cuts, he does not describe offsetting tax increases. TPC’s Bob Williams says the plan “doesn’t appear to make the rich pay any more, and what detail we have suggests they would probably pay less… From the looks of it, they would do very well. But without the details, we can’t say for sure.”
Cutting the top income tax rate doesn’t do much to reduce income inequality. TPC’s Bill Gale and Brookings Institution’s Melissa Kearney and Peter Orszag share results from an analysis using TPC’s microsimulation model. Increasing the top individual tax rate to as high as 50 percent has “exceedingly modest” effects, changing the Gini coefficient, a measure of income inequality, by only 0.01. They assume that all new revenue would be redistributed to households in the bottom 20 percent of the income distribution.
Tax brackets: They’re not the key to tax code simplification. Does reducing the number of tax brackets simplify the tax code? Nope. TPC’s Bill Gale explains: “The real complication in the system is in the tax base, not in the rate structure.” And University of Southern California’s Ed Kleinbard says, “The call for fewer tax brackets in every case has as its real motive lowering the tax burden on the highest-income Americans.”
Chris Christie can’t increase the state’s gas tax without cutting other state taxes. The New Jersey governor and GOP presidential candidate says he can’t consider a gas tax increase without cutting, say, New Jersey’s estate tax and inheritance tax. He says those taxes prevent New Jersey from being competitive.
Today on the Hill. The Senate Finance Committee holds on hearing on Puerto Rico’s debt crisis. The panel will hear testimony from Puerto Rico’s congressman Pedro R. Pierluisi, Melba Acosta of the Government Development Bank for Puerto Rico, Doug Holtz-Eakin of the American Action Forum, and Sergio Marxuach of the Center for a New Economy. House Majority Leader Kevin McCarthy has launched his bid to be Speaker of the House. House GOP members plan to include the repeal of some taxes under the Affordable Care Act in a budget reconciliation bill—an effort that will meet with a Presidential veto. Will there be a shutdown? October 1 is two days away.
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