In a Saturday op-ed from The New York Times, Nobel Prize-winning economist Joseph Stiglitz warned that President Donald Trump and the Republican Party are planning to raise taxes on many Americans with a new "secret" provision in the Tax Cuts and Jobs Act.
"President Trump and his congressional allies hoodwinked us," he wrote. "The law they passed initially lowered taxes for most Americans, but it built-in automatic, stepped tax increases every two years that begin in 2021 and that by 2027 would affect nearly everyone but people at the top of the economic hierarchy. All taxpayer income groups with incomes of $75,000 and under — that's about 65 percent of taxpayers — will face a higher tax rate in 2027 than in 2019."
Stiglitz claimed that the provision is essentially a tax increase that is "dressed up" as a reduction. According to the economist, Trump and his allies speculated that if tax increases took place after the 2020 election, most of the individuals hit hardest by the boost would not remember the party responsible for the jump.
The economist pointed to the Congressional Budget Office and Joint Economics Committee, which allegedly estimated that people with an income between $20,000 to $30,000 will pay an extra $365 next year. But by 2027, when all of the provision's laws are in place, the bill will split the country into two groups: people making over $100,000 — who will get an average tax cut — and those earning under $100,000, who will get hit hardest.
The columnist also claimed that Trump's taxation bill thus far has failed in its job creation promises and said most of the savings from the proposal went to stock buyback that was funneled into executive payments.
According to Stiglitz, Democratic presidential candidate Joe Biden's plan would reverse most of the purported damage done by Trump's tax plans. If a Democratic president is not elected, the economist said this harm would wreak even more havoc on U.S. citizens who are struggling.
"The increases, unfairly aimed at the vast majority of Americans who are disproportionately suffering in the pandemic, will cause even more hardship."As The Inquisitr noted, the non-partisan Tax Policy Center previously pointed out that over 60 percent of the savings from Trump's 2017 tax cuts went to individuals in the top 20 percent of the country's income bracket. In addition, the cuts decreased the corporate taxation rate by 40 percent.
Per NPR, the two-year anniversary of the Republican tax reductions late last year showed that economic growth was virtually identical to 2015 numbers. This finding ran contrary to Senate Majority Leader Mitch McConnell's claim that the legislation would provide America with a permanent economic boost.