Trump supporters greet tax law with shrugs and measured hope

2017-12-24 09:32
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West Des Moines - Ask someone like Sam Banks about the tax plan President Donald Trump signed into law Friday and you hear something other than the effusive joy Republicans in Congress put on display a few days ago. 

The $1.5 trillion plan cuts taxes broadly while bestowing its richest benefits on companies and wealthy individuals. It is the first major legislative achievement for a president who rode to the White House with the full-throated backing of people like Banks who felt America's economic policies needed a drastic overhaul.

Yet Banks, a 50-year-old farmer in sparsely populated southwestern Iowa, regards the tax plan with a blend of indifference and uncertainty tinged with hope.

"They had to do something, though it took them long enough," Banks said of the president and the Congress his party fully controls. "It's going to help the companies. It's got to help me a little, I suppose".

Tax rate slashed

In pockets of the country where Trump scored big with voters last year, the response to the tax overhaul is mainly a muted one. You'll get a few blank stares, some confusion and a bit of hedged optimism. What you won't hear is excitement.

Nearly all taxpayers will receive an initial tax cut. But an analysis by the Tax Policy Centre shows that the gains favour the wealthy. For households earning between    $48 600 and $86 100, the average tax cut in 2018 will be $930. But the top 1% of earners - with incomes above $732 800 - will enjoy an average tax cut next year exceeding $50 000.

And companies will benefit from having their top marginal tax rate slashed from 35% to 21%.

This is not a bill written with the core Obama-Trump voters in mind," said Henry Olsen, a senior fellow at the Ethics and Public Policy Centre in Washington. "In the short term they get a little but not a lot".

One thinking behind the corporate tax cuts is that they will turbo-charge business activity and that ordinary Americans will, in time, receive benefits in the form of better jobs and higher wages. Most mainstream economists, though, have expressed skepticism that workers will benefit much from lower corporate taxes.


Read more on:    donald trump  |  us

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