By Annie Acosta, Director of Fiscal and Family Support Policy

May 1, 2017 – Washington, D.C. President Donald Trump released an outline of his tax reform proposal on April 26. In what he calls “the biggest individual and business tax cut in American History,” the President offers a plan than would disproportionately benefit the wealthiest of citizens and substantially add to federal deficits and the debt. Low income Americans, including the disproportionate number with disabilities, would eventually be faced with even greater cuts to critical federal programs to make up for the resulting budget shortfall.

President Trump’s 2017 Tax Reform for Economic Growth and American Jobs

“The Biggest Individual and Business Tax Cut in American History”

Goals for Tax Reform

  • Grow the economy and create millions of jobs
  • Simplify our burdensome tax code
  • Provide tax relief to American families—especially middle-income families
  • Lower the business tax rate from one of the highest in the world to one of the lowest

Individual Reform

  • Tax relief for American families, especially middle-income families:
    1. Reducing the 7 tax brackets to 3 tax brackets for 10%, 25% and 35%
    2. Doubling the standard deduction
    3. Providing tax relief for families with child and dependent care expenses
  • Simplification:
    1. Eliminate targeted tax breaks that mainly benefit the wealthiest taxpayers.
    2. Protect the home ownership and charitable gift tax deductions.
    3. Repeal the Alternative Minimum Tax.
    4. Repeal the death tax.
  • Repeal the 3.8% Obamacare tax that hits small businesses and investment income.

Business Reform

  • 15% business tax rate
  • Territorial tax system to level the playing field for American companies
  • One-time tax on trillions of dollars held overseas
  • Eliminate tax breaks for special interests

Throughout the month of May, the Trump administration will hold listening sessions with stakeholders to receive their input and will continue working with the House and Senate to develop the details of a plan that provides massive tax relief, creates jobs, and makes America more competitive – and can pass both chambers.

To understand the impact of this tax plan on people with intellectual and developmental disabilities (I/DD) and their families, it is also necessary to look at some of the basic facts about current tax policy. As the leading charitable organization advocating on behalf of people with intellectual and developmental disabilities, The Arc seeks to ensure that federal funding for programs that help our constituents to live meaningful lives in the community is preserved.

Essential federal programs like Medicaid, Social Security, Supplemental Security Income, and the many discretionary programs – like education, housing, and employment – are all funded through tax dollars, whether through individual, corporate, payroll, excise, estate, or other taxes. As stated by former Supreme Court Justice Oliver Wendell Holmes, Jr., “taxes are the price we pay for a civilized society.”

In addressing the impact of the plan, it is necessary to look at the assumptions in the plan’s goals, along with some of the details of the proposed changes:

  • Grow the economy and create millions of jobs is a basic goal and assumption of this plan. However, the argument that tax cuts will be made up for by increased economic activity has long been discredited by leading economists. At most, a small percentage can be recouped. Read more on this from the Committee for a Responsible Federal Budget.
  • Simplify our burdensome tax code. Reducing the current 7 tax brackets to 3 tax brackets (for 10%, 25% and 35%) does little to make taxes any easier to complete. It would simply lower the amount of revenue generated.
  • Provide tax relief to American families—especially middle-income families. The implication that America is a high tax country is only true if the United States is compared to all nations, including the majority that are developing. When compared to other developed nations, the U.S. tax burden is below average. Learn more on comparative income taxes from the Pew Charitable Trusts.
    On average, Americans pay an effective income tax rate of 9.5 percent, according to research by the Tax Policy Center. As shown below, however, the federal tax system is progressive with middle income Americans paying a much lower rate. Those with incomes between $30,000 and $50,000 pay almost no federal taxes, and consequently, would stand to gain very little with the Trump tax cut plan.
  • Lower the business tax rate from one of the highest in the world to one of the lowest. While the top statutory corporate tax rate of 35% in the U.S. (shown right) is, in fact, among the highest, the effective tax rate is much lower. The average effective tax rate – the actual rate paid after deductions and credits – is slightly lower than other developed countries (27.1% versus 27.7%). See Congressional Research Service (CRS) report for more information.

Further, it is important to note that corporate tax contributions have been steadily declining for decades. As shown below, the corporate share of federal tax revenue now only accounts for 11% of federal revenue, down by two-thirds in 60 years.

One of the reasons for this drop is changes in how corporations are operating and being taxed. An increasing number of corporations’ profits are subject to no taxation (foreign profits that stay abroad) or different taxes (income tax in the case of S corporations). S corporations are structured as “pass through” entities. They do not pay the corporate income tax, but rather pass profits through to owners who pay tax under the individual income tax at a lower rate. Over 90% of U.S. businesses do not pay the corporate tax rate.

President Trump’s plan to allow S corporations to pay the proposed top business rate of 15% instead of the rate they pay under their current individual tax rate (see brackets below) would disproportionately benefit the very wealthy while draining public revenues. Currently, only individual income below $37,950 a year is taxed at 15 percent or less. Under the Trump plan, anyone who makes their income via a pass-through entity would pay the 15% rate no matter how much they made. President Trump owns over 500 such business entities, according to the Trump Organization’s tax counsel.

Source: Tax Foundation

Not explained in the President’s plan is that it will increase deficits by an additional $3 to 7 trillion over 10 years, according to the nonpartisan Committee for a Responsible Federal Budget . The proposed 60% cut in the corporate tax rate alone would lose $2.4 trillion over 10 years. Such massive cuts to revenues could have substantial impact on all human services funding, including services and supports for people with I/DD.

House and Senate leadership have consistently required that legislation be “paid for” in order to move through the legislative process and the President’s plan does not include viable pay-fors, therefore creating a major conflict if there is any interest in moving it forward. The Arc will remain vigilant in monitoring the impact of the plan if it begins to move legislatively.

For additional resources on federal taxes and the President’s plan see:

47 thoughts on “Can People with Disabilities Afford this Tax Cut?

  1. I’m the owner of JustCBD company ( and I am currently trying to develop my wholesale side of business. I really hope that someone at targetdomain give me some advice 🙂 I thought that the most suitable way to do this would be to talk to vape companies and cbd retailers. I was hoping if anybody could recommend a dependable site where I can purchase Vape Shop Business Data I am already considering, and Not exactly sure which one would be the most suitable solution and would appreciate any advice on this. Or would it be simpler for me to scrape my own leads? Ideas?

  2. I blog often and I seriously thank you for your information. This great article has truly peaked my interest. I am going to bookmark your blog and keep checking for new details about once per week. I subscribed to your RSS feed too.

  3. Your style is unique compared to other folks I have read stuff from. Many thanks for posting when you’ve got the opportunity, Guess I will just book mark this blog.

  4. This is the perfect website for everyone who really wants to find out about this topic. You realize a whole lot its almost hard to argue with you (not that I really will need to…HaHa). You certainly put a brand new spin on a topic which has been discussed for many years. Excellent stuff, just great!

  5. Oh my goodness! Awesome article dude! Thank you, However I am encountering issues with your RSS. I don’t understand why I am unable to subscribe to it. Is there anybody having identical RSS problems? Anybody who knows the answer can you kindly respond? Thanx!!

  6. I blog quite often and I genuinely thank you for your information. This article has really peaked my interest. I will take a note of your blog and keep checking for new information about once a week. I subscribed to your RSS feed too.

  7. Can I simply say what a relief to uncover someone who genuinely knows what they’re discussing on the net. You certainly know how to bring a problem to light and make it important. More people really need to check this out and understand this side of your story. I was surprised you’re not more popular given that you definitely have the gift.

  8. I really love your website.. Very nice colors & theme. Did you make this site yourself? Please reply back as I’m hoping to create my own site and would like to know where you got this from or exactly what the theme is named. Appreciate it!

  9. Hello there! I just wish to offer you a huge thumbs up for your great information you have got here on this post. I’ll be returning to your web site for more soon.

  10. Spot on with this write-up, I seriously feel this web site needs far more attention. I’ll probably be returning to read more, thanks for the information!

  11. Aw, this was a really nice post. Spending some time and actual effort to make a superb article… but what can I say… I hesitate a whole lot and don’t manage to get nearly anything done.

  12. Next time I read a blog, I hope that it doesn’t fail me just as much as this particular one. I mean, Yes, it was my choice to read, however I actually believed you would have something interesting to talk about. All I hear is a bunch of moaning about something that you can fix if you weren’t too busy seeking attention.

  13. Spot on with this write-up, I honestly think this website needs a lot more attention. I’ll probably be back again to read through more, thanks for the info!

  14. Hi there, I think your web site might be having browser compatibility issues. Whenever I look at your web site in Safari, it looks fine however when opening in I.E., it’s got some overlapping issues. I simply wanted to provide you with a quick heads up! Besides that, great blog!

  15. After exploring a handful of the blog articles on your site, I seriously appreciate your technique of writing a blog. I saved it to my bookmark website list and will be checking back in the near future. Please visit my web site too and let me know your opinion.

  16. I’m amazed, I must say. Rarely do I come across a blog that’s equally educative and interesting, and let me tell you, you’ve hit the nail on the head. The issue is something which not enough men and women are speaking intelligently about. I’m very happy that I came across this in my search for something relating to this.

  17. Hello there! I could have sworn I’ve been to this blog before but after browsing through many of the posts I realized it’s new to me. Anyhow, I’m certainly pleased I discovered it and I’ll be bookmarking it and checking back frequently!

  18. I was very happy to discover this great site. I want to to thank you for your time just for this wonderful read!! I definitely liked every bit of it and I have you bookmarked to look at new information on your website.

  19. You have made some good points there. I checked on the internet for more info about the issue and found most people will go along with your views on this website.

  20. Right here is the right web site for anybody who would like to find out about this topic. You understand so much its almost hard to argue with you (not that I really would want to…HaHa). You certainly put a new spin on a topic which has been written about for many years. Great stuff, just great!

  21. Hello there! This blog post could not be written any better! Looking at this post reminds me of my previous roommate! He always kept talking about this. I most certainly will send this article to him. Fairly certain he’s going to have a good read. I appreciate you for sharing!

  22. Nice post. I learn something totally new and challenging on blogs I stumbleupon every day. It’s always interesting to read through articles from other authors and use something from their sites.

  23. Everything is very open with a precise clarification of the issues. It was definitely informative. Your website is extremely helpful. Many thanks for sharing!

  24. When I initially commented I seem to have clicked on the -Notify me when new comments are added- checkbox and now each time a comment is added I receive four emails with the same comment. There has to be a way you are able to remove me from that service? Many thanks!

  25. Having read this I thought it was really enlightening. I appreciate you spending some time and energy to put this article together. I once again find myself personally spending a significant amount of time both reading and leaving comments. But so what, it was still worth it!

  26. Good post. I learn something new and challenging on blogs I stumbleupon on a daily basis. It’s always interesting to read articles from other authors and practice something from other web sites.

Leave a Reply

Your email address will not be published. Required fields are marked *