President Donald Trump‘s tax plan “would give the richest Rhode Island taxpayers an average $86,610 tax cut, which is 1.7 times the annual income of middle-income Rhode Islanders,” reports the Economic Progress Institute (EPI) based on a new analysis from the Institute on Taxation and Economic Policy (ITEP). The report shows that “a federal tax reform plan based on Trump’s April outline would fail to deliver on its promise of largely helping middle-class taxpayers, showering 61.4 percent of the total tax cut on the richest one percent nationwide.”
In Rhode Island, the top 1 percent of the state’s residents would receive an average tax cut of $86,610 compared with an average tax cut of just $430 for the bottom 60 percent of taxpayers in the state.
“All too often, policymakers talk about tax cuts as though they don’t have consequences,” said Rachel Flum, Executive Director of the Economic Progress Institute. “But the truth is, tax cuts that largely benefit the wealthy would come with a heavy dose of cuts to vital programs and services. Reducing investments in health care, education, food assistance, disability insurance and other programs is too steep a price to pay to give Rhode Island’s wealthiest residents a tax cut that is more than the household income of most Ocean State working families.”
The tax cuts will result in savage cuts to programs that benefit the poor as well. “Trump’s tax proposals would cost at least $4.8 trillion over ten years,” says the ITEP report, “In the short-run this might just mean higher government deficits, but eventually Congress and the President would almost surely have to cut major programs like Medicare, Medicaid, food assistance and others to offset the costs. This reality is reflected in the draconian cuts from programs for low- and moderate-income people that the Trump administration recently proposed in its budget. Low- and middle-income families would probably lose far more as a result than they gain from the small tax cuts President Trump would provide them.”