President-Elect Donald Trump didn’t run a campaign promising to raise taxes on the working class, but that’s exactly what he’s going to do when he takes office. Economists have analyzed his proposed tax plan and concluded it is bad news for Main Street America. At least 8.5 million families, particularly working single parents, are going to receive an unpleasant surprise on April 15, while Trump’s billionaire friends will be enjoying their unprecedented tax savings.
The current tax plan gives working parents significant tax breaks for each child in their family. This is intended to help off-set the costs of feeding, clothing and caring for children. Under Trump’s proposed plan, families will no longer receive additional benefits for each child, so large families will see their tax burden rise significantly. He also plans to raise taxes on the lowest earners, those making under $19, 625, by 2%. Although Trump has loudly touted his plans to raise the dependent care tax credit, a new analysis from the Urban-Brookings Tax Policy Center says an increased tax credit won’t be enough to counter-balance the rising tax burden.
At the other end of the scale, the wealthiest Americans are set to gain massive benefits. The top 1% of earners are scheduled to enjoy 47% of tax cuts, saving them an average of over $200,000 per years. Another big benefit they will likely enjoy under Trump is the elimination of the inheritance tax, also referred to as “the death tax” by conservatives. Currently, estates worth more than $5.45 million must pay 40% in taxes before passing the wealth onto the family’s heirs. President-Elect Trump hates this tax and has frequently promised to eliminate it; critics argue this will only increase income inequality as “dynastic wealth” grows over generations.
Following Donald Trump’s surprising election victory on November 8, economic anxiety has become a major talking point. Commentators have latched onto the theory that middle-class Americans watching their high-paying jobs overseas voted for Trump as a way to protect their own financial health. Initial exit polls showed that working-class white voters overwhelmingly chose Trump over Clinton. However, some are questioning that theory as more sophisticated data analysis shows that high-income voters picked Trump and low-income voters chose Clinton. In this post-truth climate, the actual data is subject to political interpretation, so it may be years before voters truly know which demographic groups voted for which candidate. However, one truth will quickly become clear: Under a Trump presidency, working-class Americans will see increased taxes and rising income inequality.