United States: Fewer taxes for the rich

A measure to benefit the middle class

United States: Fewer taxes for the rich 

Leer en Español: Estados Unidos: Menos impuestos para los ricos

Donald Trump has announced the framework for a new tax regime to be applied inside the United States of America. The updated tariff system involves bringing down the top corporate rate from 35% to an estimated 20%. Individuals will face no more than a 12% levy and a 25% contribution shall be applied to several business owners. 

The new deduction plan is oriented to strengthening the North American middle class. The plan also provides a working-class relief even though blue collar workers will see the reform’s benefits via the trickle-down system.

A new tax reform comes into a discussion in the midst of the North American economic recovery, which has seen a positive signal through the sustained increase of the Federal Reserve’s interest rate from December 16, 2015. Rising rates implies confidence in the American economy at the cost of fewer incentives for credit. The economic machine needs a boost.

What’s the plan?

The American government pursues the overall development of the middle class without sacrificing its harmony with the productive elites. In order to fulfill its promises, favorable conditions for those who own capita must be put into practice as low levels of unemployment must be maintained.

Donald Trump and the Republican council are looking forward to continuing luring international companies to invest in factories located in the United States; an early victory for the North American president’s dynamic was Foxconn’s decision to open a factory in Wisconsin which will employ 13,000. The Taiwanese electronics manufacturer creates LCD displays for both Apple and Samsung.

The bottom line

Emmanuel Saez, Berkeley’s economist and collaborator of Thomas Piketty, proved that America’s 1% accounts for about 20% of the total income in the North American country. There is no doubt that income inequality is at an all-time high and it has no signs of turning back; income inequality is a rule for the years to come.

Donald Trump represents the middle ground between the average American and the affluent society. As a social agreement between the parties, the well-off individuals will not sacrifice additional income by redistributing it to less prosperous segments of the society making the only feasible middle ground is the creation of a larger economy where more individuals are set to participate.

The government of the United States of America has set its growth expectations to the 3%, which is attainable based on the current market behavior, but must keep close attention to the popular dissent that arises from the highest levels of plutocracy in Western history.

 

 

Latin American Post | David Eduardo Rodríguez Acevedo

Copy edited by Susana Cicchetto 

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