Wealthy donors contributed a record $50.5 million at a recent fundraising dinner for former President Donald Trump, with potential benefits awaiting them if he returns to the White House. At the event hosted by billionaire investor John Paulson, Trump emphasized his intention to extend the tax cuts implemented by congressional Republicans in 2017, a move that primarily favored the affluent.
The contrast in tax policies between Trump and President Joe Biden, who aims to raise taxes on the wealthy while safeguarding lower-income earners, has become a focal point in the upcoming election. Biden's campaign swiftly criticized Trump's stance, accusing him of promising tax advantages to billionaire supporters.
The fate of the 2017 tax law's individual provisions, scheduled to expire next year, hinges on the outcome of the November elections. If the tax cuts are prolonged, over 60% of the benefits would accrue to the top 20% income bracket, with more than 40% benefiting the top 5%.
If Trump's proposal materializes, individuals earning between $400,000 and $1 million could see an average tax reduction of $15,000, boosting their after-tax incomes by 3.1%. Those earning $1 million or more might enjoy an average tax cut of around $50,000, increasing their after-tax incomes by 2.3%. In contrast, only a quarter of individuals in the lowest income households would experience a tax decrease, averaging $100 and raising their after-tax incomes by 0.5%.
The Tax Cuts and Jobs Act of 2017 significantly favored the wealthy, with the highest-income individuals receiving the most substantial tax reductions. The law encompassed various changes, including adjustments to individual and corporate tax rates, standard deductions, child tax credits, and estate tax exemptions.
