Should the Rich Pay Less Taxes? Trump Tax Plan Could Grow Class Divide

President Trump meets with Democratic and Republican members of Congress in the Cabinet Room as his administration prepares to bring tax reform legislation before Congress. Win McNamee/Getty Images

President Trump is expected in a speech tonight to announce significant tax cuts for the wealthiest Americans and on corporations — and in doing so, widen the class divide that's splitting the country.

Preliminary reports show a tax code favoring the wealthy. According to a leak to Axios, the new plan would cut the top tax rate for corporations from 39.6 percent to 25 percent, further reducing the amount of revenue collected from America's businesses. In the 1950s, about 30 percent of federal income came from corporations. By 2015, it was down to 10.6 percent.

On a personal level, Trump will propose that the top income tax rate, for those who make more than $418,000 a year, will be cut from 39.6 percent to 35 percent, according to the Washington Post.

Bloomberg reported that the lost revenue may be made up by cutting state and local tax deductability, a plan that would hurt high earners in "high tax" (and mostly Democrat-leaning) states such as New York and California.

Whatever Trump decides, the public is not calling for tax cuts, polls show. A new Washington Post-ABC News poll showed that more than 60 percent of Americans believe large corporations aren't paying their fair share as it is. And in 2015, a Pew survey revealed that 60 percent believe that "some wealthy people" and "some corporations" are shirking their tax responsibility.

Just 11 percent of the respondents to the Washington Post-ABC poll thought businesses pay too much and 17 percent thought they paid the right amount.

But good policy can overcome a lack of public support. But it's not clear that cutting taxes on the wealthy and corporations would be good policy. The International Monetary Fund reported that income inequality has been rising so quickly in the U.S. that it threatens the durability of economic growth as a whole.

The wealthiest one percent have benefited disproportionately from economic growth in recent years, according to the IMF, leaving the majority of Americans behind. And these Americans say they're paying too much in taxes, and that it propels them further away from the rising top percent.

Both Democrats and Republicans who responded to the Washington Post-ABC poll, feel the current tax system is "rigged in favor of the wealthy." Only five percent think the current tax plan is good for the middle class.

Even if Trump's tax plan does help economic growth of the population as a whole, "top earners" will benefit "much more than others," the International Monetary Fund report shows.