Republican presidential front-runner Donald Trump proposed slashing taxes for Americans and corporations alike on Monday in his most specific policy proposal to date.
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In laying out his plan on Monday, Trump also attacked what he says is a growing trend of corporate “inversions”, in which USA corporations move the legal address of their headquarters overseas to reduce their tax liability. Today, the Donald is getting ready to announce the details of his plan to cut taxes for the middle and lower classes. Trump said the numbers will work out as long as “the economy grows the way it should grow, if I bring jobs back from China, from Japan, from Mexico, from so many countries”.
Trump would be introducing a zero-percent tax bracket for all single people earning less than $25,000, as well as all jointly filing married couples earning less than $50,000. They get a new one page form to send the IRS saying, “I win“, those who would otherwise owe income taxes will save an average of almost $1,000 each. But Trump would keep the most popular deductions-a generous standard deduction of $25,000, plus the mortgage interest and charitable deductions.
It would reduce the number of tax brackets from seven – with marginal tax rates ranging from 10 to 39.6 percent – to four – ranging from zero to 25 percent. He would also prevent companies from deferring taxes paid on income earned overseas. He also wants to eliminate the so-called carried interest loophole that allows managers of hedge funds and private equity firms to pay a lower tax rate than most individuals.
Now that I’ve looked at the good and bad policies in Trump’s plan, I can’t resist closing with a political observation.
Tax experts rejected that analysis.
As Trump revealed his plan at a press conference, Norquist’s influential Americans for Tax Reform released its review that Trump’s plan is “consistent” with the advocacy group’s “Taxpayer Protection Pledge”. “He strongly indicated in television interviews the rich wouldn’t like this plan”.
CBS Trump told Pelley “this is an un-Republican thing for me to say, but I am going to take care of everybody”. That’d be double the cost of the proposal from former Florida Gov. Jeb Bush. Marco Rubio, another candidate with a detailed plan, would tax all business income at no more than 25 per cent. Mr Bush has proposed a 20 per cent top corporate rate.
Reuters photographer Randall Hill took a photo of a man named Lloyd Petersen, checking his camera before Trump spoke.
Trump said the changes he wants to make to the US tax code would not add to the annual federal budget deficit and the overall national debt, in part because his plan would bring in new sources of revenue to the Treasury. When asked who would pay more, he said: “Some very wealthy are going to be raised”.
Most economists say such a high growth rate is unrealistic.
But in what he conceded is a departure from his own party’s approach, Trump also vowed to make some of the wealthiest Americans – namely some Wall Street players – pay more taxes.
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That’s because their income is treated as carried interest and taxed at the lower capital gains tax rate. That’s true. But (a) the bulk of the benefits will disproportionately benefit those at the top; and (b) Trump has presented no credible means to pay for any of this. “Now they are talking about moving from the United States to Ireland, and to England and to other places, to Spain where they get treated differently, and frankly better“. That was because he does not like the way the country’s current leadership spends his tax money, he said.
