“Fiskally irresponsible”: Trump's “large, beautiful bill” benefits the rich at the expense of the poor | US taxation

The Republicans in Congress try to adopt a new tax and issue a legislative template that may be a “large, beautiful bill” – but mainly for wealthy Americans.

In view of the majorities in the house and in the Senate, the Republicans are working to say goodbye to the great beautiful draft law that is to make permanent, enormous tax cuts that were founded in 2017.

The Republicans say that the new legislative template “will reduce expenditure and reduce taxes for families and workers' creators” and ultimately “have the government work more efficiently and effectively for all Americans,” said House Johnson's spokesman after the law was passed.

However, the largest deductions will ultimately go to the richest Americans who can save hundreds of thousands of dollars a year if the 2017 tax cuts are permanently.

For most Americans, the law on tax cuts and jobs 2017 (TCJA) decreased easily after changes to the standard deduction rate were made and tax rates for most tax classes were reduced. The invoice also increased the tax credit for children from USD $ 2,000 per child.

The calculation was a big blessing for wealthy Americans who, according to tax cuts, recorded great savings. The legislation has determined an income deduction of 20% by certain business units called pass-through companies, including LLCs and partnerships. It also doubled the exemption from supplies and gift tax from $ 5.5 million to $ 11.2 million per person, mainly helping for wealthy families.

Since the invoice for even the richest Americans reduces taxes in the highest part of the top income class, this has led the Americans to save much more than the Americans of the lower or even bourgeois class under 0.1%.

A diagram that has average tax cuts from the tax cuts and jobs in various income clips

In the new invoice, the new invoice is also permanently made in order to reduce corporation tax rate, which has dropped from 35% to 21% after the tax cuts have passed.

The Federal Government has cost a reduction in corporation tax rate billions of dollars. From 2018 to 2021, the top companies in the USA have saved a combined tax of $ 240 billion after an analysis of the Institute for Tax and Economic Policy after an analysis by the Institute for Tax and Economic Policy.

Trump defended corporate tax break in 2017 and said that it would be “fantastic” for people with medium -sized incomes and jobs, which means that companies will use their tax savings to invest in more employees and higher wages.

However, some economists say that the tax cuts have not contributed little to help the middle class. In 2019, wage growth slowed down, two years after the cuts and only grew modestly due to inflation and high demand for workers immediately after pandemic.

In the meantime, companies spared more savings on share buying – if a company buys shares of its own shares, a step that primarily benefits shareholders – than ever.

Last year, Goldman Sachs estimated that share bakes will be reached this year for the first time this year when stock returns grow. An analysis of the progressive Thinktank collaboration showed that 11 top consumer goods companies, including Procter & Gamble, Pepsico and General Mills, have issued a collective purchase of $ 463 billion for share access.

With regard to the overall economy, economists say that a large part of the state income growth is due to the inflation and recovery of the pandemic recession that can be seen on the US stock markets – not to the 2017 tax cuts.

“In general, the economy has shown no dramatic changes due to the tax cuts adopted in 2017,” said Joseph Rosenberg, a high -ranking scholarship holder at the tax policy center. “Most of the high -quality evidence of us indicate that all effects on the economy were relatively modest.”

It is estimated that tax cuts will be the federal government 4.6 z.

In order to compensate for the costs of tax reductions, the Republicans combine tax cuts with cuts for important state aid programs that the republican of the federal government will save 1 trade fairs. With stricter work requirements for Medicaid and the SNAP program (Supplemental Nutrition Assistance Program), fewer people will access reporting on state health care and food aid.

The invoice is also intended to end clean energy tax creditors that were passed under the bid administration, encouraged companies to use carbon-free energy sources and to strengthen the production of clean energy technology.

Trump also said that his tariffs “will bring trillion dollar to reduce our taxes and pay our public debt”. It is estimated that they would only bring in an estimated 3.1 TN $ 3.1TN in the next 10 years if all of Trump's announced tariffs are announced, including the break, including the retaliation tariffs. The 10% universal tariffs would generate sales of 2.17 TN $.

Graph in which the costs for tax cuts are compared with income from which the tariffs are expected to bring in

Customs are also a form of tax for the vast majority of American companies that import goods from abroad. In the past few months, companies such as Walmart and the Tymaker Mattel have announced that they ultimately have to pass on some of the costs for tariffs to consumers.

The analysis from the Yale Budget Lab estimates that higher prices cause an average American consumer to spend 2,800 US dollars more due to tariffs. Those at the end of the distribution of income could lose 1,300 US dollars.

Democrats have criticized the draft law in general, with the chairman of the Senate, Chuck Schumer, denounced him as a “cruel and dangerous program”, which will affect the working class, especially by families of the working class that will also be affected by Trump's tariffs.

“It is really noteworthy that this invoice is both indispensable for tax purposes,” said Daniel Hornung, the former deputy director of the National Economic Council and a high -ranking scholarship holder on. “People who earn less than $ 50,000 a year will actually decrease their income, and it is really the financing of tax cuts for largely high income.”