Mixed reviews for Trump’s tax overhaul
> US labour union cites new plan as ‘con game’ saying it will benefit only the wealthy and not the working class
WASHINGTON: President Donald Trump’s new plan for broad-based income tax cuts debuted to mixed reviews, with industry cheering while economists cautioned it could increase deficits with only modest gains in growth.
The largest US labour union, meanwhile, denounced the new plan as a “con game” likely to result in cuts to essential public services and social spending in the coming years.
Trump and Republican lawmakers on Wednesday rolled out the new plan, seeking deep cuts to the corporate tax rates, which would officially fall from 35% to 20%, while abolishing the estate tax on inheritances.
Brad Close, senior vice-president at the National Federation of Independent Business, said the tax overhaul was crucial for jump-starting investment and job creation.
“Small businesses account for nearly half of gross domestic product and create two out of every three new jobs,” he told AFP. “Small businesses have never fully recovered from the global crisis.”
US industry has persistently campaigned for lower corporate tax rates and for a simplified tax code, arguing that they restrain economic activity and prevent hiring.
The National Retail Federation said Wednesday a comprehensive tax overhaul, the first since 1986, would result in higher wages and more jobs.
The organisation cited a recent internal study, which it said showed that cutting corporate taxes to 20% would generate between 500,000 and 1.5 million new positions and could encourage foreign retailers to invest in the United States.
Such a corporate tax rate would fall below the average of 22.5% in industrialised nations.
However, Richard Trumka, president of the AFL-CIO, was scathing in his criticism of the tax proposal.
“The tax plan Republicans put out today is nothing but a con game, and working people are the ones they’re trying to con,” Trumka said in a statement. – AFP