We should also expect Trump to take cues from Ryan on tax policy. Over the course of his campaign, Trump has gradually adjusted his tax proposal to match "A Better Way," an economic agenda including a tax reform proposal that Ryan put out in June. Both Trump and Ryan propose replacing the current seven-bracket income tax structure with just three: 12 percent, 25 percent, and 33 percent.
Because the current top rate is 39.6 percent — plus a 2.9 percent Medicare surtax from Obamacare that Trump and Ryan promise to repeal — the plan would reduce the tax rate paid by the richest Americans by nearly 10 points. And while both Trump and Ryan propose increasing the standard deduction to offset the increase in the bottom rate from 10 to 12 points, at least some people would fall through the cracks all the same.
NYU Law's Lily Batchelder conservatively estimates that 25 million individuals and 15 million children would see their taxes go up under Trump's plan. That's about 20 percent of households with minor children at home, and includes more than half of all single parents. The combination of an increased bottom rate, Trump's total elimination of personal exemptions for taxpayers and dependents, and his abolishing of "head of household" filing status, often used by single parents or single caretakers, leaves many people in the middle class worse off.
Batchelder provides several examples of families that would see their taxes go up under Trump's plan. The biggest hikes number in the thousands of dollars and are concentrated among single parents:
A single parent with $75,000 in earnings, two children in school, and no child care costs (because the kids are in school) would pay $2,440 more.
A single parent with $50,000 in earnings, three children in school, and child care costs of less than $6,000 would pay $1,188 more.
A married couple with $50,000 in earnings, two kids in school, and no child care costs would pay $150 more because of the bottom bracket's increase from 10 to 12 percent.
The Tax Policy Center still finds that Trump would on average cut taxes for every income segment, though a minority of the middle class would face hikes. Ryan's plan offers very modest cuts across the board in 2017 but by 2025 would start increasing them for upper-middle-class people in the 80th to 95th percentile. Given that it also raises the bottom rate and repeals personal exemptions — just like Trump's plan — it's quite likely that many families lower down will see tax hikes as well.
Investors and corporations, by contrast, would do extremely well under both Ryan and Trump's plans. Ryan's plan would effectively decrease the top tax rate on capital gains and dividends from 23.8 percent to 16.5 percent, and on interest income from 43.4 percent to 16.5 percent, according to the Tax Policy Center.
Trump and Ryan both promise to dramatically slash the corporate tax rate from its current peak at 35 percent; Ryan wants a 20 percent top rate, and Trump wants 15 percent. Given that the corporate tax is, according to the Tax Policy Center, even more progressive than individual income taxes, that change will almost certainly increase income inequality.
What's more, Trump would apply the new 15 percent rate to pass-through income, which is currently taxed at higher individual rates. Rather than pay a top rate of 39.6 percent, or even 33 percent after Trump's cuts, it would pay a mere 15 percent. Ryan wants a new, lower 25 percent rate for this income.
It should probably be noted that most of Trump's own business efforts are organized as pass-through entities. His losses from those companies were what let him evade taxes for several years. He and Ryan are essentially proposing a big tax cut for the Trump Organization. The other beneficiaries will be rich too; about 69 percent of pass-through income goes to the top 1 percent of earners.