For all those who voted for economic Change with a capital c*, let's see what the tea leaves predict might change, compared to the Obama administration:
1. The estate tax might go away. Such a relief, because it currently affects all ordinary Americans who leave 5.45 million dollars or more to their heirs. I can already see the boom this causes in the Rust Belt, even if the Trump administration replaces it with a capital gains tax for that portion of the inheritance which exceeds 10 million dollars:
If estate tax repeal happens, it would be a tremendous gimme to the rich (including eventually Trump and his family). In tax year 2015, just 4,918 estates paid $17 billion in estate taxes (less than 1% of federal revenue). More than a third was raised from the richest of the rich—the 266 estates valued at $50 million or more brought in $7.4 billion to the Treasury.
2.. Wall Street is celebrating:
Christmas has arrived early for Wall Street in the early days of the Donald Trump era.
A populist candidate who railed against shady financial interests on the campaign trail is now putting together an administration that looks like an investment banker’s dream.
Former Goldman Sachs banker Steven Mnuchin has been seen at Trump Tower amid rumors that he’s the leading candidate for Treasury secretary. Billionaire investor Wilbur Ross appears headed to the Commerce Department. Steve Bannon, another Goldman alum, will work steps from the Oval Office. JPMorgan Chase CEO Jamie Dimon remains a possibility as Treasury secretary and will serve as an outside adviser if he doesn't get the job.
It’s a restoration of Wall Street power — and a potential flip in the way the industry is regulated — perhaps unparalleled in American history.
3. Remember how Trump swore not to touch Medicare, the federal health care funding program for the over-65 population? Well, things have changed, what with the election, and now it will be "modernized:"
There’s a lot that you should know about the Republican Medicare plan, a plan that Speaker Paul Ryan (R-WI) hopes to enact shortly after President-elect Donald Trump takes office, but the entirety of it can be summarized in just one sentence.Republicans want to charge seniors a lot more for inferior health coverage.
Given that voting for Trump was positively correlated with age, that's an interesting choice. Note, also, that Medicare is not the only program funding the health care needs of the elderly. Medicaid, the system which currently funds health care for the poorest of the poor, also funds a considerable chunk of long-term nursing care for the elderly. The Republicans plan to suffocate it over time:
It is hard to overstate the importance of Medicaid, which insures 77 million people, pays for more than half of all births in some states, covers about two-thirds of nursing home residents and provides treatment for many people addicted to opioids. Spending on Medicaid, by the federal government and states combined, exceeds $500 billion a year.Of the 20 million people who have gained coverage under the Affordable Care Act, officials estimate, 12 million are insured by Medicaid — with few of the problems that have plagued the new insurance exchanges, or marketplaces.But change is coming. In his campaign manifesto, Mr. Trump said Congress must repeal the Affordable Care Act and give each state a lump sum of federal money — a block grant — for Medicaid. Congress passed legislation in January to repeal the health law and roll back its Medicaid expansion. Mr. Obama vetoed the measure, but Speaker Paul D. Ryan of Wisconsin has vowed to put similar legislation on a Republican president’s desk.
Bolds are mine.
Block grants are wonderful devices for cutting funding, if they are not adjusted for inflation or population changes over time. If the Republicans are successful in making such cuts, Trump-supporters, among others, may have to start saving a lot of money for grandma's nursing home expenses (which averaged almost 7000 dollars a month in 2016).
4. Trump campaigned on huge tax cuts for the middle class, for the "forgotten men and women of this country." Reality is more complicated:
But Trump's plan does the opposite, says Lily Batchelder, a law professor at New York University and visiting fellow at the Tax Policy Center.
"If you look at the most wealthy, the top 1 percent would get about half of the benefits of his tax cuts, and a millionaire, for example, would get an average tax cut of $317,000," she says.
And not all middle class Trump voters would see their taxes drop:
Lily Batchelder, a law professor at NYU and visiting fellow at the Tax Policy Center, says Donald Trump's plan would boost taxes for many families, with some of the largest increases applying to single-parent families "because of the repeal of the head of household filing status and personal exemptions."Hmm. Wonder if any of that was intended? After all, the Christianists who voted for Trump don't like families led by single mothers, though of course these rules also apply to single fathers and widowed individuals, whatever their sex.
- A single parent with $75,000 in earnings, two school-age children and no child care costs would face a tax increase of around $2,440.
- A single parent with $50,000 in earnings, three school-age children and no child care costs would also face a tax increase of around $1,188.
- A married couple with $50,000 in earnings, two school-age children and no child care costs would face a tax increase of about $150.
- Other married couples would get almost no benefit.
* This post concentrates on proposed changes which are not going to help Trump supporters with moderate incomes. The super-rich are naturally going to have a bonanza.