Just Taxes Blog by ITEP

Key Resources for Digging into the Trump and GOP Tax Reform Agenda


May 5, 2017

ITEP
ITEP Staff

President Donald Trump’s tax sketch released in late April is the starting point for federal tax reform discussions. For now, the sketch includes too few details to properly analyze its revenue and distributional impacts, but based on limited information, corporations and the wealthy stand to benefit most. Below are resources ITEP has produced on tax reform. If and when the Trump Administration or Congress release more details about a proposed tax reform plan, ITEP staff will continue to provide analyses and commentary, especially about how any tax proposal would affect working people and the federal government’s ability to fund basic services and programs.

Commentary on President Trump and House GOP’s Tax Plans

Both President Trump and Congress have floated tax plans that would redistribute wealth to corporations and the already rich. Multinational corporations are immensely profitable and currently pay barely more than half the 35 percent statutory corporate tax rate (the average effective rate for profitable corporations is 21.4 percent), yet policymakers are proposing to drop  the corporate tax rate to 20 or even 15 percent with no clear plan for closing the copious loopholes that allow corporations to avoid federal taxes in the first place. Further, this drive to cut taxes for corporations and the rich is contrary to the public will.

 

Full Revenue and Distributional Analyses of Trump Campaign and House GOP Tax Plans

The so-called “Better Way Plan,” released by Speaker Paul Ryan and the President’s campaign tax plan, are currently the only substantive tax proposals on the table, and it’s reasonable to surmise these proposals will help form the basis of tax legislation moving forward. For each of these plans, ITEP dived into their details and used its microsimulation model to estimate their total revenue and distributional impact. The one common thread between the old plans? Profitable corporations and the wealthiest 1 percent of taxpayers are the biggest winners.

 

Resources on Key Features of the Trump and House GOP Tax Change Priorities

The Trump Administration and House GOP have each put out basic goals for tax legislation, including a corporate rate cut, moving to a territorial tax system, a border adjustment tax, a repatriation holiday, and estate tax repeal among other things. These and other pieces of the plan warrant component-by-component evaluation. ITEP research on some of the most prominent pieces of their plans is below.

Corporate Rate Cut

Move to Territorial Tax System

Border Adjustment Tax

Repatriation Tax Break

Tax Breaks for Child and Dependent Care

Estate Tax Repeal

Pass Through Loophole

Carried Interest Tax Break Repeal

Net Investment Income Tax Repeal

Economic Growth Paying for Tax Cuts

 

Progressive Tax Reform Options

If the Trump Administration and Congress plan to make the first fundamental overhaul to the nation’s tax system in a generation, it is critical to take a step back and discuss how tax reform can improve the lot of all Americans and what the majority of taxpayers think lawmakers should focus on. Public opinion polls overwhelmingly show that a majority of the public do not want another round of tax cuts that primarily benefit the wealthy and corporations. True, sustainable tax reform and related proposals should increase revenue and the overall fairness of our tax system.