Report: Trump's Budget Proposals Would Help Rich, Hurt Poor Americans
Monday, July 31, 2017
DENVER – The Trump administration's tax proposals would not benefit all taxpayers or states equally, according to new analysis from the Institute on Taxation and Economic Policy.
Matt Gardner, a senior fellow with the institute, says the richest 1 percent of taxpayers would receive more than 60 percent of the tax benefits.
He adds that poorer states, largely in the South and Southeast, would get a portion of the tax cuts lower than their share of the U.S. population.
"Richer states tend to do better, poorer states tend to do worse – in a way that mirrors what's happening nationwide, with richer Americans getting the lion's share of the benefits and poorer Americans being comparatively left out in the cold," Gardner states.
Proponents of Trump's proposal say all Americans will see their taxes reduced, and maintain the move will boost revenues by stimulating economic growth.
Gardner disagrees, and notes the nation's top earners will get an average of $145,000 in tax breaks, compared with just $130 for the bottom 20 percent of earners.
Gardner adds there's no evidence to support the supply side argument that tax cuts can pay for themselves. He says the tradeoff on nearly $5 trillion in lost revenues would likely be cuts in health care, education and food assistance programs.
"Under any realistic view of the economic consequences of this plan, we're going to see larger budget deficits,” he stresses. “First on the chopping block would be federal aid to low-income Americans."
The White House also has proposed cutting SNAP benefits, the program formerly known as food stamps, by 25 percent over the next decade.
Orgul Ozturk, an associate professor of economics at the University of South Carolina, says in the wake of the last recession, and the continued drop in real wages, SNAP is a lifeline for the nation's working poor.
"There's this new group of SNAP recipients – not the elderly, not the children – but working poor, who just can't make enough,” she states. “Even though they are working, they cannot earn enough to be over the poverty threshold."
Ozturk says nearly 70 percent of SNAP recipients are children, seniors and people with disabilities, and more than 20 percent work full-time, are caretakers or are enrolled in training programs.
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