US President Donald Trump’s Chief Strategist Steve Bannon seemingly plans to push for a tax hike for wealthy Americans.
Bannon’s plan reportedly jacks up tax for the highest income bracket in an effort to make up for lost revenue resulting from a tax cut for lower and middle income classes.
As originally reported by Jonathan Swan on Axios, Bannon’s proposal looks for the top income tax bracket, which currently sits at 39.6 percent, to “have a 4 in front of it.”
The highest income tax bracket applies to individuals who make more than $418,400 and couples whose combined salaries add up to $470,700 or higher.
Opinions on Bannon’s Tax Hike Proposal Vary
Many pundits believe Bannon’s suggestion points to his efforts of returning the Trump administration to its populist pre-electoral position, one that might better cater to its working-class supporters.
According to Jordan Bhatt writing for International Business Times, Bannon’s “counterintuitive idea that goes against established conservative thinking on tax is considered to be a classic posture by Bannon who styles himself as iconoclast of America's ruling elite.”
Tina Nguyen for Vanity Fair takes this point a step further: “Bannon’s idea could prove popular among Trump’s working-class supporters—particularly if it happens to rile up Washington. But it’s not clear how it would fit into the plan being drafted by fellow Trump advisors Gary Cohn and Treasury Secretary Steven Mnuchin, who have been grinding away at their attempt to slash the corporate tax rate to 15 percent. It’s possible that Trump could achieve some sort of bipartisan compromise, uniting Republicans and Democrats around a plan to cut the corporate rate while increasing top marginal taxes on the very rich.”
Nguyen concludes, however, that, “it seems unlikely that Bannon, despite surviving several attempts to push him out of the West Wing, retains enough capital to revive whatever populist promise the Trump campaign once offered.”
Vox’s Dylan Matthews, for one, supports Bannon’s vision and believes the Trump administration should definitely raise taxes on the rich.
In a recent piece, Mathews wrote: “Giving up on individual income tax rate cuts, and embracing higher rates for top earners, would free up a lot more money for corporate tax cuts. The Congressional Budget Office estimates that raising the brackets for people making more than $400,000 or so by 1 point each would raise about $93 billion over 10 years. For a new top rate of, say, 47 percent, that could mean as much as $650 billion over 10 years, and even more if you’re willing to hit 50 percent or raise taxes on people making under $400,000.”
Grover Norquist, President of Americans for Tax Reform, disagrees with Mathews and told CNN that Bannon’s idea is “a particularly cruel thing…to do.”
Norquist, who is an anti-tax campaigner and a staunch Republican, added, “Had we grown during the Obama year at Ronald Reagan rates of 4% rather than 2% as Obama did there would be 12 million more Americans working today…That's the problem we need to fix. That's why Trump won the election. Raising taxes hurts economic growth, Obama reminded us of that.”
People close to The White House, however, suggest, “There are no plans…to modify its proposal or get behind the idea of raising the top marginal rate from where it is currently.”
A high level official stated that the administration “[was] beyond” Bannon’s idea of a tax hike for the rich.
Additionally, Press Secretary Sean Spicer clarified that what’s being report on Bannon’s plan “is not an accurate representation of Steve's thinking.”
Poll Shows US Supports Tax Hike for the Wealthy
While this tax hike might be a pipe dream, it falls in line with what most Americans desire.
A poll held in May by Morning Consult and Politico suggests that 62 percent of Americans believe the country’s rich do not pay enough in taxes.
Furthermore, according to a Business Insider article on the aforementioned poll, “72% of people said the tax system is not fair to individuals, 51% said the code is not fair to businesses, and 73% said the system favors the wealthy.”
Pundits also suggest that, even if Bannon’s desire took place, individuals in the highest income bracket would still significantly benefit from Trump’s plan to drop the US’s corporate tax rate from 35 to 15 percent.
In general, what do you think about raising taxes for the wealthy? Wise move or counterproductive? Let us know in the comment section!