Commentary: Trump's recent economic speech is a continuation of the failed trickle-down economics policy that has been promoted by Republicans for 36 years. During this time period, wealth and income inequality has increased tremendously. Payroll taxes have gone up, top marginal tax rates have declined and effective tax revenue from Corporations have declined from 15% of Federal revenue to about 5%.
Today, about 38% of Federal revenue comes from payroll taxes, 42% from Federal income taxes and the rest from tariffs, excise taxes and others. Even though Corporate tax rates in the U.S. are 35%--thanks to tax credits, exemptions and offshore tax havens the effective rate is much lower—where many pay none.
A recent study by GAO found that in 2010 the effective corporate tax rate was 12.6%. Trump wants to bring the statutory rate down to 15% with no change in deduction policy.
We now have a regressive tax system where typical wage earners have a much higher tax rate that investment earners—who are the super-rich.
We need to go back to a progressive tax policy where everyone pays their fair share.