Since Donald Trump‘s advisors last week unveiled his new tax plan, billing it as the “the biggest tax cut and largest tax reform in the history of our country,” experts are still asking just how it would help the middle class, not to mention the poor.
The plan calls for steep reductions in individual and business income tax rates and a far-reaching overhaul of the tax code that would sharply benefit the wealthy. But the plan benefits for middle income earners is less clear.
“Trump’s blueprint––a list of bullet points released on April 26––would directly reduce taxes for upper earners by cutting the top income-tax rate to 35 percent from 39.6 percent; eliminate the Alternative Minimum Tax, which raises the tax bills of certain taxpayers on the higher side of the income scale; and scrap a 3.8 percent investment income tax under Obamacare that applies to individuals with incomes of more than $200,000, writes Bloomberg News. “The plan would also repeal the estate tax, which would save an estimated $200 billion over a decade for individuals with estates worth more than $5.45 million.”
While Democrats are ready to fight Trump over the tax cuts, one area where they may be able to find middle ground is on tax code reform. Some tax experts believe tax code reform should include provisions that encourage investment in cities that produce economic growth and jobs.
“In that context, one approach worth considering is the so-called border adjustment tax, an obscure policy with widespread implications,” writes the Houston Forward Times. “Among other things, the border adjustment tax policy would exempt businesses from paying taxes on products that are produced domestically but exported to other countries. The policy essentially rewards domestic manufacturing, potentially helping contain the nation’s industrial decline.”
Indeed, the border adjustment tax could greatly improve communities of color that have languished for decades since companies moved jobs overseas to countries with lower taxes, forcing African Americans to slide into economic decline in cities like Baltimore, Chicago, New York, and Houston.
To be sure, the reform has its opponents, namely the conservative billionaire Koch Brothers, and other dissenters, who argue that the status-quo tax policies are in the nation’s best interests. Koch Industries spent nearly $10 million last year lobbying against the reforms, according to disclosures, writes CNN.
“Supporters of the blueprint understand the importance of reforming our tax code in a way that incentivizes investment in the United States and the production of American goods, in American towns, by American workers,” John Gentzel, a spokesman for a consortium of businesses lobbying for the provision, tells CNN. “Meanwhile opponents of the blueprint are trying to stop tax reform and keep the current broken tax system that puts American workers at a disadvantage.”
Here Is How Tax Code Reform Could Help Black & Brown Communities was originally published on newsone.com