How appalling is Donald Trump’s tax plan? Consider this: While showering trillions of dollars on America’s wealthiest families, it would somehow manage to raise taxes on working-class single parents.
That’s according to a new Tax Policy Center analysis of the Republican nominee’s most recent proposal, which, like its predecessor, is an enormous gift to his fellow millionaires and billionaires. Trump decided to tone down his original tax plan after think tanks calculated it would probably cost somewhere in the neighborhood of $10 trillion over a decade—which is to say, more than the Medicare budget. Version 2.0 has a slightly less astronomical price tag: TPC estimates it would cost $6.2 trillion over its first 10 years, and $8.9 trillion over its second. But its favors are still very much skewed to the rich. About 47 percent of the benefits would go to the highest-earning 1 percent of Americans; the bottom 60 percent would receive just under 11 percent of the benefits.
But Trump’s plan isn’t merely despicable because it disproportionately benefits the wealthy. According to TPC’s analysis, it would actually take money away from single mothers and fathers, as well as married parents with large families. How so? Trump would eliminate the “head of household” filing status, which many single parents rely on, as well as personal exemptions, which let filers deduct $4,050 from their taxes for themselves and each of their dependents. In their place, he’s creating a larger standard deduction worth $15,000 for solo taxpayers. But that’s less help than what single-parent families receive now. Today, a single mother with one child could get a $9,300 standard deduction as household head and personal exemptions for herself and her daughter, all adding up to $17,400.
Meanwhile, Trump would increase the lowest tax rate from 10 percent to 12 percent. So some parents would find themselves paying higher rates while having fewer deductions to offset them. It’s possible that Trump’s advisers assume his new deductions for child care expenses will offset the potential tax hikes. But that seems unlikely; many families won’t take advantage of the deductions, because even with them, they won’t be able to cover the cost of day care.
The end result of all this is that Americans among the bottom 80 percent of taxpayers who currently file as heads of household would on average see their IRS bills rise, while those in the top 20 percent would get a cut.
These changes don’t just affect single-parent families. Married couples who have lots of children also benefit from personal exemptions and could be hit by Trump’s changes. In other words, Trump’s plan takes money from many lower- and middle-income parents and distributes it upward. When Hillary Clinton said her opponent “would end up raising taxes on middle-class families, millions of middle-class families,” this is what she was likely talking about.
Of course, Trump’s plans are never set for long, and it’s unclear if he or anyone on his staff has actually thought these issues through—the Tax Policy Center sent the campaign dozens of questions about specifics of their blueprint, which it declined to answer. But if someone in the Trump camp has actually considered all of this and decided they were happy with the proposal regardless, it amounts to a massive failure of moral and economic judgment. Both Democrats and Republicans have spent decades now trying to encourage low-income families to work by lowering tax rates and supplementing their wages. This is the polar opposite. It’s impoverishing those who need help most.