Janina Lim – Fourth Estate Contributor
Washington, United States WA – President Donald Trump promises American families an addition of $4,000 in annual income if the administration succeeds in drastically slashing business tax rates.
An analysis by Kevin Hassett, chairman of the White House Council of Economic Advisers, claims that low corporate rates will attract investments which, in turn, would spur hiring activities and employment.
Trump has said he would like to see the U.S. corporate income tax rate cut down to 20 percent from the current 35 percent rate. This move will translate to gains of $4,000 a year to a high of $9,000,the White House analysis said.
Overall gains from this cut would “conservatively” generate a $504 billion revenue, P200 billion more than the revenues currently generated by the corporate income tax.
Trump has underscored that his tax plan is leaned on improving the lives of the middles class but several studies have suggested otherwise.
As the proposal would slash the number of tax brackets for individuals and families to three from seven and double the standard deduction, it would also remove the personal exemption and the deduction for state and local taxes which could result in an increase in taxes for families.
A preliminary analysis by the nonpartisan Tax Policy Center, a study slammed by Hasset as “fiction” that is “scientifically indefensible, estimated that the proposal would cut business taxes by $2.65 trillion in ten years while increasing the tax burden on families and individuals by $471 billion.
Another study that contradicts the benefits of the tax reform to the middle class is the 2012 Treasury Department analysis — now erased from the agency’s website – which said that it is the investors who are most likely to benefit from savings, debunking claims of a potential salary hike.
Hassett said he expects wages, which has been on a lackluster level, begin rebounding after the passage of the proposed tax reform.
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