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The White House has just 12 days to fix a glaring flaw in President Donald Trump's tax plan.
That's because just this morning (Sept. 13), his administration promised to provide further specifics on that plan no later than Monday, Sept. 25.
So what's the flaw?
The Institute on Taxation and Economic Policy (ITEP) has found that Trump's tax proposal, if implemented according to the guidelines released on April 26, would reduce the share of taxes paid by America's "top 1%," while it would increase the share of taxes paid by the middle class.
The middle class will pay more, and the richest people in the country will pay less.
Check it out…
Trump's Tax Plan Gives Perks to the "1%," Shirks Everyone Else
ITEP – a nonprofit, nonpartisan tax research organization – released the following chart this morning within its report.
The chart compares the expected increase or decrease that members of eight U.S. income brackets could expect from Trump's tax plan, based on the April guidelines.
The organization concluded that Trump's tax plan would decrease what those in the United States' highest income bracket (the "top 1%") could expect to pay in shares of federal, state, and local taxes combined: 20.3%.
Compared to the 23.8% share of total taxes presently paid by this small sliver of the public, that's a nice 3.5% cut.
Urgent: An $80 billion cover-up? Feds use obscure loophole to threaten retirees… Read more…
Conversely, ITEP found that those in the middle-income bracket (those with an average income of $50,500 per household, according to the agency's calculations) could expect a 0.3% increase in total taxes paid under Trump's tax plan.
That comes to about $150 of added taxation these folks will have to pay in federal, state, and income taxes per year.
And if you're in that tax bracket, you know that $150 is nothing to sneeze at.
For example, American households bringing in $56,000 annually spend precisely that much on groceries per week, according to the U.S. Bureau of Labor Statistics this past February.
Middle-class Americans don't need a week's worth of groceries stolen from them every year. In fact, the key to economic growth is a tax cut for the middle class.
So says Money Morning Capital Wave Strategist Shah Gilani.
Shah gave his thoughts on Trump's tax reform on FOX Business Network's "Varney & Co." on Aug. 30. He told the panel it's about time the American public sees some concrete details coming out of the White House – and that the markets won't react to anything less.
But it's not just the executive branch that's on the hook here.
"[Investors] want to hear something concrete come out of not just the [Trump] administration, but from Congress too," Gilani said.
Check out the full conversation right here…
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- Institute on Taxation and Economic Policy: Trump Proposal Would Reduce the Share of Taxes Paid by the Richest 1%
- Money Morning: The Koch Brothers Are Steering Trump's Tax Reform Policy
- Money Morning: How Trump's Tax Reform Could Reshape the U.S. Economy: Explained
- Money Morning: This One Image Explains Trump's Tax Plan