Trump Advisor Accidentally Raises Middle-Class Taxes

For indispensable reporting on the coronavirus crisis, the election, and more, subscribe to the Mother Jones Daily newsletter.


Here is Gary Cohn—supposedly one of the “smart ones” in the Trump administration—explaining the president’s tax plan:

The median income in the United States today is … about $56,000. You take the $24,000 away from the $56,000, you’ve got taxable income of $32,000. At a 10% rate that’s $3,000 of tax. If you have one or two or three children and we give you $1,000 tax credit, you could end up with a—you know, very marginal, single-digit tax rate to no taxes whatsoever. That, to me, is a middle-income tax cut because you’re going to owe no taxes potentially.

“Potentially” is doing a lot of work here, as David Kamin explains:

Cohn forgot to mention the fact that our tax system, as it is currently written, provides what are called “personal exemptions” to families….The plan Trump presented on the campaign trail would eliminate these personal exemptions….So when you take into account the elimination of personal exemptions, families aren’t actually getting much tax relief after all. In fact, if that family has two or more kids, they’d actually face a tax increase under the Trump plan described by Cohn.

Here this is in chart form:

This should come as no surprise. The problem is that the average family pays most of its taxes at the state and local level, and via payroll taxes. Their federal income tax rate is already “very marginal, single-digit tax rate to no taxes whatsoever,” so it’s all but impossible to cut it. This is from the Tax Policy Center:

The bottom 40 percent pays no federal income tax at all and the average middle-class person pays 6.4 percent of their earnings in federal income taxes. If you focus solely on the federal income tax—as Republicans always do—you can’t help the middle class much. Even in theory, the only people who really benefit are high earners.

Of course, you can still do a little to help middle-class workers—but only if you’re careful. Cohn wasn’t careful, so he ended up increasing middle class taxes. It’s an easy mistake to make.

SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

payment methods

SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate