Reprinted from Robert Reich Blog
Donald Trump poses as a working-class populist, but about his new economic plan would be a gusher for the wealthy. And almost nothing will trickle down to anyone else.
He'd knock down the top tax rate on businesses from 35 percent to 15 percent, thereby richly rewarding the investor class.
He'd cut taxes the top tax rate on the wealthy from 39.6 percent to 33 percent, another boon to the top.
He'd eliminate the estate tax -- now paid by a relative handful of families whose net worth exceeds $5.5 million.
Not incidentally, this is an especial windfall for the Trump family. If Trump is worth as much as he says, his heirs would get a tax break of $4 billion to $7 billion.
He'd let global corporations pay just a 10 percent tax rate on untaxed offshore profits -- another mammoth gift to big shareholders.
Consider: Apple, Pfizer, Microsoft and other global American corporations hold $2.4 trillion in earnings abroad. They owe some $700 billion in taxes on these earnings. Trump's 10 percent tax rate would raise only about $150 billion. It wouldn't even generate new investment in America. A tax amnesty was tried in 2004 and it was a dud.
Yes, he'd also lower taxes on lower-income Americans. But the biggest beneficiaries by far are the wealthy.
Trump says his tax cuts would cost $4.4 trillion over 10 years. He claims most of it would be paid for by economic growth.
We've been here before.
Both Ronald Reagan and George W. Bush tried supply-side "trickle-down" economics. We should have learned two lessons.
First, nothing trickles down. The giant tax cuts on the wealthy enacted by Reagan in the 1980s and Bush in the 2000s enriched those at the top -- but the wages of the bottom 60 percent went nowhere.
Second, such tax cuts produce giant budget deficits. Under Reagan and George H.W. Bush, the federal budget deficit exploded. It took Bill Clinton's administration (of which I was proud to have been a member) to get the budget back in some semblance of balance.
Then, under George W. Bush, what happened? The deficit exploded again.
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