DAY 249: Trump's tax plan raises taxes for poor and lowers them for the rich

The tax plan unveilled today by Donald Trump increases taxes for the poor, changes nothing for the middle class, and lowers taxes for the rich.

According to The New York Times, the tax plan eliminates the 7 current income brackets and establishes 3 brackets with the following income tax rates:

Lowest bracket: 12% income tax.
Middle bracket: 25% income tax.
Top bracket: 35% income tax.

The problem is that means the poor will pay 20% more taxes; part of the middle class will pay 25% more taxes, and the rich will pay nearly 13% LESS taxes.

This is due to the fact that the current lowest bracket pays 10% in income taxes. By paying 12%, the poorest will pay 20% more compared to what they used to pay.

In the middle class bracket, which is the people who make $37,950 to $91,900 per year, income tax is currently 25%. Which means there is no change for the middle class in how much taxes they pay.

And for the very rich, who currently pay 39.6%, they will have a reduction of nearly 12% of the taxes they pay. Interestingly, the tax cut for people who make over $91,900 but less than $418,400, will be lower, ranging from nothing to 10.7%

And that's assuming the standard deductions are not changed. If they are, and they are reduced, as Trump's people have suggested, there will be a net increase in taxes for the middle class instead of a no-change rate.

Another gift for the rich in Trump's tax plan is the elimination of the estate tax, which will allow rich paople to pay nothing for millions or billions of dollars for their inheritances.

Yet another gift for the rich: Instead of paying 39.6%, or even the proposed 35%, the richest Americans who make money from their businesses will pay 25% instead with the so-called pass-through rate. In short, the richest Americans will pay the same tax rate as the middle class today. That's a 36.8% tax cut for the richest Americans.

Corporations would also benefit from Trump's tax plan, as the corporate rate would get reduced from 35% to 20%, a 42.8% reduction for some of the richest corporations in the world with no real benefit to the rest of working class and middle class Americans, as tax cuts have never resulted in increased jobs or wages, as it was the case with the W. Bush era tax cuts.

On the contrary; the Bush era tax cuts ended up increasing the national debt.

Which is exactly what all estimates say about this tax plan, from a conservative 2.2 trillon cost to up to 7 trillion over 10 years.

And the poor and the middle class will end up paying for that tax cut for the rich.