This Is How Donald Trump Is Cutting Your Paycheck
Congressional Republicans are planning a highly unpopular tax plan that benefits business owners and the wealthiest Americans in large part.
To sell him, the White House claims that every American will benefit from the bill in the form of an additional $ 2,000, and they have dubbed Donald Trump “the President of the Salary .”
This all sounds good. Personally, I would like another $ 2,000. But as always, there are nuances.
From the tax plan we have, the cuts for individuals are short-lived and largely disappear within 10 years, even as corporations continue to enjoy massive cuts. They’re also not as generous as the GOP advertises: independent analyzes have pushed the cut to $ 1,200 in 2019 , or about $ 23 a week. And the richest Americans will benefit far more than the middle class, as Howard Gleckman, Forbes correspondent notes:
On average, an employee in the top 1 percent will receive about $ 8,700 in tax cuts in 2019, while a business owner will pay $ 87,000 less.
In addition, the Center for Tax Policy argues that most people will actually be worse off when you consider what Congress will have to do to offset the estimated $ 1.4 trillion in revenue loss, including things like Social Security cuts, Medicare and Medicaid. …
Overall, “President on Pay” is more of – and it may surprise you – a hypocritical nickname, as Vox’s Matt Iglesias tweeted, given other measures the Trump administration has taken that are not benefiting workers.
Let’s deal with this.
Overtime rule
Employers are currently required to pay overtime for most salaried workers earning less than $ 23,660 a year, a figure that has not changed since 2004. The Obama administration’s Labor Department last year issued a regulation that raised the threshold to $ 46,476. expanding rights to more than 4 million employees.
Business groups and 21 states challenged the rule, arguing that DOL had exceeded its mandate and a federal judge overturned it in August. In September, the Justice Department refused to defend him.
There is some potentially good news for workers: the Trump administration has said it will raise the wage threshold, but not to $ 46,476. So far, nothing of the kind has emerged. But a wage hike for 4 million workers would probably be a better way to increase their wages than a one-time tax cut, which they may not even benefit from.
Equal pay rule
Also in August, the Trump administration lifted the Obama-era rule that large companies were required to report wage information, disaggregated by race and gender, to the Equal Employment Opportunity Commission.
The so-called equal pay rule is intended to help narrow the gender pay gap by making wages across industries more transparent. Opponents, including Ivanka Trump , said it would burden the business and ultimately not affect the wage gap.
Sorry women who thought this could help bridge the $ 500,000 to $ 1 million wage inequality that you face – would you spend that $ 1,200 on bitcoin?
Exchange Tips
This month, the Labor Department introduced a rule that waiters and other tipped workers must share the tip with their peers and possibly managers if they earn at least the federal minimum wage, repealing the Obama-era rule (noticed the topic?) the tip belonged to the employee who received it.
The Trump administration says it will help service workers who are usually not tipped, such as cooks and dishwashers. Opponents say it will allow employers to steal workers’ tips. The left-wing Institute for Economic Policy estimates that employers will pocket $ 5.8 billion in tips because the rule does not require employers to tip after they merge.
Fiduciary rule
An Obama-era fiduciary rule required financial advisors to work in the best interests of their clients by advising them on retirement investments. Nowadays, commission based consultants can sell you products for which there is an additional fee, even if there are others that do not require commissions that are just as good – and even as little as 1% makes a huge difference in the long run. …
Although it was due to go into effect this year, DOL has repeatedly delayed its introduction, which means that those paid products can still be marketed to people saving for retirement. What is the cost for investors? According to the Institute for Economic Policy, about $ 10.9 billion over 30 years (the fees add up!). But perhaps a $ 1,200 tax cut will offset that.