The income tax has been slashed so many times since 1981 that it’s no longer a broad based societal tax; it’s a kind of luxury tax on upper income salary earners and the small share of households which garner most of the capital income from dividends, interest payments and capital gains…Stockman went on to point out that 60% of tax filers accounted for 5% of tax revenue. In addition, 35% of tax filers – more than 52 million filers at the bottom and middle of the income ladder – didn’t pay a single dime of taxes after deductions, exemptions and credits. I think Stockman was sloppy with his wording in saying, "the income tax has been slashed so many times". Tax rates go up and down regularly. I think he means the number of people paying income tax has been slashed.
Look at what he's saying. The top 40% of incomes pay 95% of tax revenues, and the bottom 35% don't pay a dime once all of the deductions, and all other systemic ways to avoid paying tax. The top 1% of earners pay 39.5% of all collected taxes.
From what I'm able to see, this isn't really a conservative plan it's more a populist plan. From a populist president and party that aren't conservative, so what a surprise, right? I hear the president insisted on leaving the highest tax bracket for the highest income earners where it is, at 39.6% so there's no "trickle down" aspect to this. Supposedly Trump said that people in the highest bracket can afford that 39.6% rate, and he insisted it stay there. Maybe that's his way of fighting the Evil party screaming that it's a "tax cut for the rich!!" Maybe he honestly thinks a 39.6% rate is a good thing.
So if the lowest half of the income range doesn't pay taxes, and the top rate stays the same, who's getting what changes? That's what the arguments are about. From what I hear, the big proposal is a return to three brackets, 12%, 28%, and that 39.6%. Exactly where those three brackets change will make all the difference in "who pays what". The simplification part of the plan (they still keep using the "fill out your taxes on a postcard" meme) raises the standard deductions so the lowest income people are expected to pay even less than now, while the highest grade may benefit a little.
The big deal is dropping the corporate tax rate from 35% to 20%. That will make investing in the US look much better to companies looking to build new facilities. Lower corporate taxes help everyone but this will have its greatest impact on small businesses and business start ups. Since it uses the word "corporate", you can be sure the core Evil party hates that part. Since they can't argue it's a tax cut for the richest, they'll fight that corporations are getting a break. Corporations pass on their taxes to their customers, so their customers pay them. Before this all started, Paul Ryan actually said something intelligent, when he said,
"We are actually unique in the world in the way we discourage capital from coming back to America and how we incentivize off-shoring jobs," ... "This is not the kind of exceptionalism we should aspire to ..."The overall progressive structure of the tax code doesn't change. We still penalize success. We have "sin taxes" on booze and tobacco to discourage their use. And we have our highest tax rate on our highest earners to discourage success.