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Trump Tax Plan Revealed To Be A Fraud That Would Cost Trillions And Benefit The Top 1%

By Jason Easley on Mon, Sep 19th, 2016 at 1:48 pm

The conservative-leaning Tax Foundation has evaluated Donald Trump’s tax plan [ http://taxfoundation.org/article/details-and-analysis-donald-trump-tax-reform-plan-september-2016 ] and found that the plan would cost the US trillions of dollars and grow the incomes of the top one percent by 10%-16%.

Trump claimed last week that his tax plan benefits the middle and working class, [ http://time.com/4495507/donald-trump-economy-speech-transcript/ ] “In addition, because we have strongly capped deductions for the wealthy and closed special interest loopholes, the tax relief will be concentrated on the working and middle class taxpayer. They will receive the biggest benefit – it won’t even be close. This is a working and middle class tax relief proposal.”

According to analysis from the Tax Foundation,, this was a lie, “On a static basis, the plan would lead to at least 0.8 percent higher after-tax income for all taxpayer quintiles. The plan would lead to at least 10.2 percent higher incomes for the top 1 percent of taxpayers or as much as 16.0 percent higher, depending on the nature of a key business policy provision.”

Donald Trump’s tax plan is designed to boost the incomes of people like Donald Trump. The wealthiest Americans will see their incomes go up by 10%-16%, while all other taxpayers will see a virtually non-existent gain of 0.8%. In other words, the Trump tax plan is designed to give nothing to 99% of Americans who aren’t at the top of the economic pyramid.

Trump also promised that his tax plan would be deficit neutral, “It will be deficit neutral. If we reach 4% growth, it will reduce the deficit.”

This is going to be next to impossible as the Trump plan will cost $4.4-$5.9 trillion. To make the plan deficit-neutral, Trump would need to drastically slash domestic spending. Since Trump has already promised to increase military spending, it will be virtually impossible for Trump’s tax plan to be deficit neutral.

Donald Trump’s tax plan is more of the same failed Republican attempt to redistribute wealth to the top in the hope that it will trickle down to the rest of us.

Trump is making promises that his tax plan can’t and won’t deliver.

A vote for Donald Trump is a vote for a tax cut for the top one percent.

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http://www.politicususa.com/2016/09/19/trump-tax-plan-revealed-fraud-cost-trillions-benefit-top-1.html


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Details and Analysis of the Donald Trump Tax Reform Plan,

September 19, 2016
By Alan Cole

FISCAL FACT no. 528: Details and Analysis of the Donald Trump Tax Reform Plan, September 2016
Key Findings
http://taxfoundation.org/sites/taxfoundation.org/files/docs/TaxFoundation_FF528_FINAL3.pdf

* Republican presidential candidate Donald Trump’s tax plan would significantly reduce income taxes and corporate taxes, and eliminate the estate tax.
* According to the Tax Foundation’s Taxes and Growth Model, the plan would reduce federal revenue by between $4.4 trillion and $5.9 trillion on a static basis. The amount depends on the nature of a key business policy provision.
* The plan would also significantly reduce marginal rates and the cost of capital, which would lead to higher long-run levels of GDP, wages, and full-time equivalent jobs.
* After accounting for the larger economy and the broader tax base, the plan would reduce revenues by between $2.6 trillion and $3.9 trillion after accounting for the larger economy, depending on the nature of a key policy provision.
* The plan reduces revenue by substantially less than the plan proposed by Trump last year, on both a static and dynamic basis.
* On a static basis, the plan would lead to at least 0.8 percent higher after-tax income for all taxpayer quintiles. The plan would lead to at least 10.2 percent higher incomes for the top 1 percent of taxpayers or as much as 16.0 percent higher, depending on the nature of a key business policy provision.

Introduction

Last Thursday in New York, Republican presidential candidate Donald J. Trump released a tax reform plan.[1] The plan would reform the individual income tax code by lowering marginal tax rates on wages, investment, and business income. Furthermore, it would broaden the individual income tax base. The plan would also lower the corporate income tax rate to 15 percent and modify the corporate income tax base. Finally, the plan would eliminate federal estate and gift taxes while eliminating step-up basis.

Our analysis finds that the Trump tax plan would substantially reduce federal revenues from both individual income taxes and corporate income taxes. These reductions in revenue come primarily from lower rates on individuals and businesses.

One particular tax rate, the individual income tax rate on pass-through business income, is not clearly specified in current plan documentation. Assuming that the individual income tax rate on pass-through business income is the same as the rates on other individual income, the Trump tax plan would reduce federal tax revenue by $4.4 trillion over the next decade. But if the tax rate on this income is instead intended to be the same as the tax rate on corporate business income, the plan would then reduce federal revenue by $5.9 trillion. In addition to these possibilities, which we see as upper and lower bounds for total revenue generation, the policy may reduce federal revenue somewhere in between.[2]

The plan would also reduce marginal tax rates on labor and substantially reduce marginal tax rates on investment. As a result, we estimate that the plan would boost long-run GDP, raise wages, and increase the equilibrium level of full-time equivalent jobs. Due to the larger economy and the broader tax base, the plan would reduce revenue by less on a dynamic basis: by $2.6 trillion over the next decade, if pass-through income is taxed as ordinary individual income, or by $3.9 trillion under the alternate assumption, where pass-through income is taxed purely at business rates.

Our analysis does not consider how or if this revenue loss would be financed, or the macroeconomic effects of such financing. Nor does it consider any policy proposals from Trump on subjects other than taxes, even though these are likely to have substantial effects on the economy as well.

Changes to the Individual Income Tax

* Consolidates the current seven tax brackets into three, with rates on ordinary income of 12 percent, 25 percent, and 33 percent (Table 1).
* Adapts the current rates for qualified capital gains and dividends to the new brackets.
* Eliminates the head of household filing status.

[...]


http://taxfoundation.org/article/details-and-analysis-donald-trump-tax-reform-plan-september-2016