With his customary fanfare, President Donald Trump has revealed what he describes as “one of the biggest tax cuts in American history.” It consists of one page and is notably sparse on details. Featured are a slashing of the corporate tax rate from 35 percent to 15 percent and a doubling of the standard deduction for married couples from $12,600 to $24,000.
The cut in the corporate tax alone, according to an analysis by the Tax Foundation, would cost the country an estimated $2.1 trillion through 2026. Besides eliminating the estate tax (paid by the estates of wealthy individuals) and the alternative minimum tax (which cost Trump $31 million in 2005), corporations would not have to pay taxes on their foreign profits. This is, to say the least, odd for a man who vilified companies who moved American jobs overseas and insisted that those jobs be filled by Americans. Remember “America First?”
The raising of the standard deduction would increase the deficit an estimated $1.5 trillion.
How will all of this be paid for? While the administration insists that the reforms will create “trillions of dollars of added revenue,” the history of tax cuts shows ambiguous results. For example, George W. Bush’s tax cuts of 2001 and 2003 were followed by years of disappointing growth, while Bill Clinton’s increases in 1993 ushered in a period of phenomenal growth.
One thing is certain, though. With his many trips to Mar-A-Lago, the cost to the taxpayers of maintaining Trump and his retinue will vastly increase.
Joe McDonnell, Belleville