Tax reform plan a ‘bid to make US inequality champion’

UN special rapporteur on extreme poverty and rights says proposed tax plan will ‘greatly increase’ income inequality.

Poverty in US
According to government figures, 40 million people live in poverty in the US [File: Gregory Bull/AP Photo]

A UN rights expert has issued a damning report on the state of the US under President Donald Trump, saying the Republican president’s tax reform plan “stakes out America’s bid to become the most unequal society in the world” and “will greatly increase” income inequality.

Philip Alston, the UN special rapporteur on extreme poverty and rights, made the comments on Friday, after visiting US cities and states to examine the level of homelessness and poverty facing the country.

The proposed tax reform plan “is essentially a bid to make the US the world champion of extreme inequality”, Alston said in his preliminary report.

Alston’s visit to California, Alabama, Georgia, Puerto Rico, West Virginia and Washington, DC came in the shadows of a major tax overhaul in Congress.

Republicans released their final tax bill on Friday night, saying they “have the votes” to get it passed next week.

The bill has been championed by Trump, who, on Friday, congratulated Republican Congressman Kevin Brady, chairman of the Ways and Means House Committee, for signing the final conference agreement on the proposed tax reform legislation.

If passed, the bill would be the largest tax overhaul since the 1980s.

The plan would drop the corporate tax rate from 39.6 percent to 21 percent. It would also lower the rates for most of the seven tax brackets, including dropping the top bracket from 39.6 percent to 37 percent, according to the Republican summary. 


The cuts are projected to add about $1.46 trillion to the deficit over the next decade, which is just shy of the $1.5 trillion the bill is allowed to cost.

According to Alston, “the lack of public debate, the closed nature of the negotiation, the exclusion of the representatives of almost half of the American people from the process and the inability of elected representatives to know any detail they are being asked to vote for, all raise major concerns.”

He added that “one of the overriding concerns … is the enormous impetus given to income and wealth inequality by the proposed reforms.”

Social welfare cuts ‘likely to be fatal’ 

Earlier this month, House Speaker Paul Ryan said Republicans will focus on reducing spending on federal healthcare and social programmes to help reduce the country’s deficit.

In his report, Alston warned that “the dramatic cuts in welfare, foreshadowed by the president and Speaker [Paul] Ryan, and already beginning to be implemented by the administration, will essentially shred crucial dimensions of a safety net that is already full of holes.”


He added that “given the extensive, and in some cases unremitting, cuts that have been made in recent years, the consequences for an already overstretched and inadequate system of social protection are likely to be fatal for many programmes, and possibly for those who rely upon them.”

Members of the opposition Democratic party and rights organisations have criticised the bill, saying it benefits big corporations at the expense of working-class US citizens.

Children’s Defense Fund, a nonprofit organisation working to reduce poverty among children, has previously called the proposed tax plan “unjust, expansive and immoral”.

The proposed bill also repeals a mandate that all Americans must buy health insurance or pay a penalty.

‘Forty million living in poverty’

Alston’s report also highlighted the extent of poverty in the US.

The UN special rapporteur placed great emphasis on how “neither [the US’] wealth nor its power nor its technology is being harnessed to address the situation in which 40 million people continue to live in poverty.”


He highlighted how indigenous communities continue to suffer from widespread, extreme poverty and high suicide rates. He also emphasised the high levels of children in poverty, calling the number – 13.3 million in 2016 – “shockingly high”. 

Alston is set to release his final report in May, which is expected to expand on the state of the US when it comes to poverty and human rights, and what the future may look like, given recent and proposed actions by the current government.

According to the UN envoy, “American exceptionalism was the constant theme” during his conversations with state and city officials, human rights groups and those living below the poverty line.

“Today’s United States has proved itself to be exceptional in far more problematic ways that are shockingly at odds with its immense wealth and its founding commitment to human rights,” said Alston.

Source: Al Jazeera