Economy 14 March 2017 Donald Trump is making America's 1 per cent richer again The richest Americans could see their incomes rise by between 10.2 per cent and 16 per cent. Getty Sign UpGet the New Statesman's Morning Call email. Sign-up As the world watches every next victim of the Trump administration, they may have not noticed one thing - the beneficiaries. Though his biggest supporters were America’s middle and working classes, and despite aggressively campaigning against the elite, Mr Trump’s policies have so far served to help the rich get richer. Thanks to Mr Trump’s annulling of red tape, described by his chief strategist and former Goldman Sachs vice president, Stephen Bannon, as the “deconstruction of the administrative state”, much of America’s wealthy have seen a mini boom in their wealth. Beyond Capitol Hill, where one of the wealthiest cabinets in US history is gathered, this economic un-policymaking his benefiting key industries and their leaders. First on the bonfire have been pieces of the Dodd-Frank Act, the regulation imposed on the financial services industry after the 2008 financial crisis. A rule requiring publically-traded oil, gas and mining companies to disclose payments made to foreign governments was the first piece of Dodd-Frank to go up in flames. The Cardin-Lugar Amendment, as it was known, promoted transparency at the expense of competition and share prices, executives argued. Former ExxonMobil CEO and now Secretary of State Rex Tillerson was at the forefront of the annulment, arguing the legislation forced firms to reveal secrets that would make them uncompetitive. The next piece of Dodd-Frank to be withdrawn will likely be The Volcker Rule, which bans banks from proprietary trading on deposit accounts (the rule was based on the belief that such high-risk speculation played a key role in the financial crisis). The Durbin Amendment and Consumer Financial Protection Bureau are other areas of Dodd-Frank under threat. “We expect to be cutting a lot out of Dodd-Frank, because frankly I have so many people, friends of mine, that have nice businesses and they can’t borrow money,” Mr Trump said in a meeting with business leaders. Other pieces of Obama-era financial regulation have not escaped this regulatory pillage. The Department of Labour’s new Fiduciary Rule may not see the light of day, following a memorandum signed by Mr Trump delaying the Rule pending a review. The Rule requires brokers to provide retirement advice that is in a client’s best interest rather than the most profitable. For the 5.3m millionaires in the US (those with a net worth in excess of $1m) the removal of these regulations spells more growth, as regulatory costs are replaced with higher share prices. Since the Presidential Election the S&P 500 has more than tripled from its trough in 2009 and the Dow Jones industrial average recently closed above 21,000 for the first time. Though this rally in shares is seemingly good for the US economy, it helps not America’s lower classes, but the "one per cent". It is the top one per cent of households that own nearly 38 per cent of all stock shares, and the top 10 per cent which own 81 per cent of stocks, according to research from New York University by Edward Wolff in 2013. Data from the Federal Reserve in 2013 showed that of the 10 per cent of families with the highest income, 92 per cent owned stock. With each millionaire allocating about 30 per cent of their portfolio to equities, they will have seen profitable returns since the election of Trump; the rest of the population will not have fared so well. Possibly the biggest change to affect the wealthy in America, however, is yet to come and it is still shrouded in mystery: Trump’s tax plan. On the campaign trail, Trump pledged to introduce tax breaks for the wealthy by collapsing the current seven tax brackets to three, with the top tier paying 33 per cent instead of the current 39.6 per cent. With this 6.6 per cent in saving, the top one per cent could see their incomes rise by between 10.2 per cent and 16 per cent, giving them an average cut of between $122,400 and $192,000, according to the Tax Foundation. Mr Trump has also signalled that he could cut the corporate tax rate from 35 per cent to 15 per cent, and eliminate the federal estate tax and gift taxes. “We’re going to... lower the overall tax burden on American businesses big-league. That’s coming along very well. We’re way ahead of schedule, I believe,” he recently said at a meeting with airline executives without giving away any specifics. With less tax, fewer regulations and thriving stock markets, it seems evident that millionaires will see their wealth prosper under the Trump administration. However, if these increases come at the expense of Middle America, Trump will have burnt the very pledge that gave rise to his presidency. His posed 20 per cent tax on imports will make enemies of Trump in both millionaire and middle class groups. This tax will shake the consumer economy at its very core, as big business and consumer alike are forced to foot the bill. If prices of consumer items rise, American’s will buy less, big business will suffer and shares will deflate. If the cost of Walmart’s groceries, Mars’s confectioneries or McDonald’s burgers were to increase following such import taxes, it would not only hurt the wallets of America’s wealthiest families – the Waltons, Mars and Reyes – but also those of America’s poorest. Not only has Trump made America’s wealthy wealthier, but he could yet make the poorest poorer. › We need a new constitutional settlement - and not just for the Scots Subscribe To stay on top of global affairs and enjoy even more international coverage subscribe for just £1 per month!