As for Trump’s medicine? That is not only unlikely to deliver to the “ordinary” American he supposedly champions - it may well make their lives worse. At best his proposed income cuts look like benefiting the rich much more than the poor.
Brookings Institution research suggests that they would lead to the 0.1% of the population who earn over £3 million seeing their taxes fall on average by £88,000 (a cut of 14%). The poorest 20% of households, on the other hand, would see their taxes cut by only £88 (a cut of 0.8%).
Lily Batchelder of NYU and the Tax Policy Center are even more pessimistic.
According to their calculations, those who are just about managing will become in real terms worse off, whilst millionaires will get an average tax cut of £255,000, a single parent earning £60,000 with two school age children will face a tax increase of over £1,900.
Trump’s proposed corporation tax cuts - whilst candy for the stock market - won’t necessarily lead to more jobs and more investment.
History teaches us that such gains do not inevitably trickle down.
A similar tax reform in 2004 which encouraged US companies to bring their funds back into the US by cutting slashing taxes lead to no increase in investment and only a transitory increase in employment.
Companies instead increased their dividend payments and share buybacks.
