Saturday, November 26, 2016

Some Middle-Class Families Would Pay More With Trump's Tax Plan

WASHINGTON (AP) — President-elect Donald Trump's proposals would modestly cut income taxes for most middle-class Americans. But for nearly 8 million families — including a majority of single-parent households — the opposite would occur: They'd pay more.

Most married couples with three or more children would also pay higher taxes, an analysis by the nonpartisan Tax Policy Center found. And while middle-class families as a whole would receive tax cuts of about 2 percent, they'd be dwarfed by the windfalls averaging 13.5 percent for America's richest 1 percent.

Trump's campaign rhetoric had promoted the benefits of his proposals for middle-income Americans.

"The largest tax reductions are for the middle class," said Trump's "Contract With the American Voter," released last month.

The tax hikes that would hit single parents and large families would result from Trump's plan to eliminate the personal exemption and the head-of-household filing status. These features of the tax code have enabled many Americans to reduce their taxable income.

His other proposed tax changes would benefit middle- and lower-income Americans. But they wouldn't be enough to offset those modifications.

"If you're a low- or moderate-income single parent, you're going to get hurt," said Bob Williams, a fellow at the Tax Policy Center.

Unlike Trump's polarizing proposals on immigration and trade, his tax plan is in line with traditional Republican policy. His steep tax cuts in many ways resemble those carried out by Presidents Ronald Reagan and George W. Bush, and the Republican-run Congress is expected to welcome them.

During the campaign, Trump said his tax cuts — for individuals and companies — would energize the economy by boosting business investment in factories and equipment, while leaving consumers with more cash to spend. His proposals, he contended, would help create 25 million jobs over the next decade.

But Lily Batchelder, a visiting fellow at the Tax Policy Center and former deputy director of President Barack Obama's National Economic Council, estimates that roughly 7.9 million families with children would pay higher taxes under his proposals. About 5.8 million are led by single parents. An additional 2.1 million are married couples.

No comments: