According to Piketty, in the early 1980s, the top 10% of US households held 50% of the nation’s total wealth, while the bottom 50% held 10%. In the first quarter of 2024, the top 10% of US households held approximately 67% of the nation’s total wealth, while the bottom 50% held approximately 2.5%, according to News UFL. This drastic wealth gap continues to expand rapidly and is becoming a growing problem in America.
On Feb. 19, 2025, Donald Trump proposed a significant tax cut for the wealthiest Americans, and on Feb. 25, that tax cut was set at 4.5 trillion dollars. But what does all of this mean for Americans in different wealth demographics? These tax cuts will help the wealthy retain more money and remove key healthcare factors that benefit those not as rich. This is a big deal in an affluent town like Westport, where many parents take home high six-digit and even seven-digit salaries each year.
I recently spoke with a Westport parent and business owner. Their concerns aligned similarly with mine. They expressed their concerns with the long-term effects on financial assets due to increased inflation as a result of taxes: Because taxes raise the national debt, inflation will eventually increase, and in turn, the value of assets will decrease in the long run.
These tax cuts began in 2017, during Trump’s first year in office. Then, Congress passed the Tax Cuts and Jobs (TCJA) Act. This legislation marked one of the most significant changes to the US tax code in decades. The TCJA lowered the corporate tax rate and temporarily reduced income tax rates amongst multiple brackets, with the most significant benefits going to higher-earning individuals.
In 2017, Trump talked a lot about how these tax cuts would benefit America’s middle class.” As a candidate, I promised we would pass a massive tax cut for the everyday, working American families who are the backbone and the heartbeat of our country,” Trump said, according to CNN.
This turned out to be far from the truth. By 2020, studies by the Congressional Budget Office and the Brookings Institution showed that the wealthiest 1% received the most benefit from the 2017 tax cuts, while the middle and lower income brackets saw modest, often temporary gains. During his second administration, Trump is still claiming that these tax cuts benefit everyone. He has said that these cuts will decrease spending on departments like education and healthcare.
Cutting federal funding is also not ideal. The parent I spoke to said something that resonated very strongly with me and is an excellent evaluation of this ordeal. Cutting government programs is not the way to fix problems within the government; you have to address the issue instead of just ignoring it and slashing other programs.
