“Too few Americans are working, too many jobs have been shipped overseas, and too many middle class families cannot make ends meet. This tax plan directly meets these challenges with four simple goals.”
Trump’s new plan began with these words; he released the plan in full Monday on his website.
His plan includes an income tax exemption for people making less than $25,000 or two joint people making less than $50,000.
“They get a new one page form to send the IRS saying, ‘I win,’ those who would otherwise owe income taxes will save an average of nearly $1,000 each.” said the plan.
The new plan will attempt to simplify the code by offering four brackets, 0%, 10%, 20% and 25%. Currently, the highest tax bracket has a rate of 39.6%.
Trump also would make businesses pay no more than 15% tax on income.
“No business of any size, from a Fortune 500 to a mom and pop shop to a freelancer living job to job, will pay more than 15% of their business income in taxes.”
The plan also seeks to end the estate tax, which would help out the wealthy. As of 2011, 98% of estate tax was payed by the top 10% of earners.
While some have praised the new plan, others point out some issues. The new tax code would most likely cost the government trillions in dollars of revenue.
“It’s pretty aggressive,” said Doug Holtz-Eakin, former director of the Congressional Budget Office and director of the American Action Forum. “To get the top rate to 25 percent is a lot of work.”
While Trump argues that the plan would grow the economy and pay for itself, a paper by William G. Gale and Andrew A. Samwick says that tax cuts have minimal effect on economic growth.