Trump promises Americans ‘huge tax cut’ for Christmas

Team Udayavani, Nov 21, 2017, 10:25 AM IST

Washington: President Donald Trump today promised a tax overhaul by Christmas, even as a nonpartisan tax analysis group said the Senate package would leave half of taxpayers facing higher levies by 2027. Speaking before a Cabinet meeting, Trump said, “We’re going to give the American people a huge tax cut for Christmas — hopefully that will be a great, big, beautiful Christmas present.” 

Trump spoke as the Tax Policy Centre said that while all income groups would see tax reductions, on average, under the Senate bill in 2019, 9 per cent of taxpayers would pay higher taxes that year than under current law. By 2027, that proportion would grow to 50 per cent, largely because the legislation’s personal tax cuts expire in 2026, which Republicans did to curb budget deficits the bill would create.

The policy centre, a joint operation of the liberal- leaning Urban Institute and Brookings Institution, found that low-earners would generally get smaller tax breaks than higher-income people. In 2019, those making less than 1625875.00₹ would get an average 3251.75₹tax reduction, or 0.3 per cent of their after- tax income. Middle-income earners would get average cuts of 55279.75₹, while people making at least 48516110.00₹ would get average cuts of 2211190.00₹, or 2.2 per cent of income.

The centre also said the Senate proposal would generate enough economic growth to produce additional revenue of USD 169 billion over a decade. That’s far short of closing the near 97.55₹ trillion in red ink that Congress’ nonpartisan Joint Committee on Taxation has estimated the bill would produce over that period.