In hope of sweeping change and major tax reform, the vast majority of working-class middle Americans voted for Donald Trump this past November. But will the President-elect’s tax plan truly benefit these citizens? In a paradoxical twist, some experts believe Trump’s tax plan will actually be more advantageous to high-income U.S. coastal residents than it will be to Americans who live in the middle of the country.

Cuts vs. Hikes

In October 2016, Trump released his “Contract with the American Voter,” a plan that outlines what he aims to accomplish in the first 100 days of his presidency – including tax cuts for most middle-class Americans. “The largest tax reductions are for the middle class,” the contract states. (For more on this read, Do Tax Cuts Stimulate the Economy?)

Middle-class families would receive approximately 2% in tax cuts under Trump’s plan, according to an analysis by the nonpartisan Tax Policy Center. While a 2% tax break is certainly nothing to sneeze at, this reduction pales in comparison to the tax cuts America’s richest 1% will receive under the plan – an average of 13.5%. 

What's more, almost 8 million families, including most single-parent households, may actually see tax increases under Trump’s plan. Couples with three or more children could also see a tax hike. Why might these families pay more? Because Trump’s plan, as it now stands, would eliminate the personal exemption and the head-of-household filing status, two features that have allowed many of these Americans to reduce their taxable income. In fact, more than 22 million Americans took advantage of these filing breaks last year. According to the Tax Policy Center, if Trump were to leave the head of household filing status and personal exemptions in place, tax revenues would be reduced by $2.1 trillion over the next 10 years.

A Tidal Wave of Tax Cuts for Coastal Elites

While middle class families could see modest tax cuts (or tax hikes, in some cases – see Trump's Upper-Middle-Class Tax Increase), experts say the wealthiest Americans are likely to benefit from Trump’s plan more than any other group.

Models by the Tax Foundation suggest that the lowest 20% of taxpayers could see their after-tax incomes increase by 6.9% to more than 8%, depending on how some of the features in Trump’s plan play out. The middle 20% would see a 7.7% to 9% income boost, and the top 20% would receive an 8.7% to 12.3% increase in after-tax income. Yet, the top 1% – the richest Americans – would enjoy a 12.2% to 19.9% rise in their after-tax income.

Many of these wealthy Americans who will see the most substantial tax cuts live not in the middle of America, but along the coasts. In fact, a large number of these coastal elites likely voted for Hillary Clinton.

According to the state-to-state income data analyzed by the Center on Budget and Policy Priorities, the top-income households that will profit the most from Trump’s tax plan live disproportionately in pro-Clinton states. Meanwhile, lower-income households that will benefit the least live primarily in pro-Trump states.

Take, for instance, the fact that Mississippi, West Virginia, Arkansas, Alabama, South Dakota, Montana and Oklahoma are all “Middle America” states that backed Trump in the election, yet only a small proportion of residents in these states (10% to 14%) are in the top income group that will benefit most from President-elect Trump’s tax plan. As a matter of fact, in all but five of the states that voted for Trump, more households fall into the lowest 20% income group than are in the wealthiest group.

The Bottom Line

While President-elect Trump plans to deliver on the tax cuts he promised to Middle America, these decreases will be minor compared to the significant reductions coastal elites will enjoy.

Will Trump voters be helped in other ways? Proponents point out that Trump’s plan is designed to stimulate economic growth.

In fact, his plan would inject $4 to $6 trillion into the economy over 10 years, primarily via business tax cuts. That's because as president, Donald Trump plans to slash the corporate income tax rate by more than half, to 15%.

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