The Trump Tax Plan: Greed Like You’ve Never Seen Before, or “Analysis of Trump’s Tax Plan Shows Big Cuts in Taxes, Federal Revenue”

Gentle Reader – Let us now say goodbye to what we thought we knew about how our Government worked. Infrastructure spending – goodby. Health care (ACA, Medicare, Medicaid) – adios. Educational assistance – adieu.
The rich will make out like – well – bandits.
This is what thumbing our nose to the elites – without thinking, without analysis – gets us. An elite thug, blending crony capitalism with fascism.
 —————————————————————-

Analysis of Trump’s Tax Plan Shows Big Cuts in Taxes, Federal Revenue

Donald Trump’s tax plan would cut federal revenue by $9.5 trillion over a decade and boost the after-tax incomes of the wealthiest households by an average of more than $1.3 million a year, according to an analysis released Tuesday.

The Republican presidential candidate’s proposal would lower income tax rates and exempt millions of low-income households, requiring significant new borrowing or unprecedented spending cuts beyond anything Mr. Trump has detailed in his campaign.

Mr. Trump’s plan, first released in September, would eliminate 22% of federal revenue over 10 years, radically shrinking the government, according to the Tax Policy Center, a nonpartisan project of the Brookings Institution and the Urban Institute.

The billionaire real-estate developer is proposing the largest, most aggressive tax overhaul of all GOP contenders. The center this month estimated former Florida Gov. Jeb Bush’s plan would cut federal revenue by $6.8 trillion over a decade.

Mr. Trump’s website says his plan would be revenue-neutral. According to the center, the limits on tax breaks proposed by his campaign are nowhere near enough to overcome the tax-rate cuts.

A spokeswoman for Mr. Trump said, “Many experts, including [economist and journalist] Larry Kudlow, have praised the plan since its release.”

The GOP candidates are all proposing to cut income-tax rates on individuals and businesses while limiting some deductions. In a shift from 2012, when Mitt Romney promised to prevent increasing the deficit or shifting the tax burden from the highest-earning households, most of this year’s candidates aren’t making either of those pledges.

By comparison, President George W. Bush’s 2001 tax cuts, first proposed when the government projected trillions of dollars of budget surpluses, were estimated at the time to reduce revenue by about 6%. President Barack Obama’s 2016 budget called for a 3% increase in overall revenues.

“The revenue losses from this plan are really enormous,” said Leonard Burman, the Tax Policy Center’s director. A bipartisan panel reviewed the report before its release.Mr. Trump’s plan would compress today’s seven individual income-tax brackets into three and set a top rate of 25%, down from 39.6%. It would exempt each person’s first $25,000, or each married couple’s first $50,000, from income taxation. The plan would cut rates on business income to 15%, eliminate the estate tax and curb some deductions.

On average, each household would get a $5,144 tax cut in 2017, increasing after-tax income by 7.1%. The gains are highly concentrated among the highest-income households, which would get a bigger percentage of the tax cuts than the share of taxes they pay now. The top 1% of households, those making over $732,323, would get 35% of the tax cuts.

On the lower end of the income scale, Mr. Trump’s plan would exempt 33 million additional households from income taxation. The study found 63% of households would pay no federal income tax in 2017, up from 44% under current law.

The center plans to analyze other plans, including those of Marco Rubio, Ted Cruz, Hillary Clinton and Bernie Sanders.

Mr. Trump’s campaign didn’t respond to multiple inquiries from the Tax Policy Center, so the analysts had to make assumptions about the details of his plan. Some of those assumptions, however, are generous to Mr. Trump. For example, his proposed 15% tax rate on business income would give workers an incentive to become independent contractors and avoid the higher rates on wages. The center assumed that the government would be able to curb such tax-avoidance maneuvers.

The estimated revenue loss is close to estimates that a separate group, the Tax Foundation, released when Mr. Trump unveiled his tax plan in September. The Tax Foundation estimated the plan would reduce federal revenue by $12 trillion over a decade, or $10.1 trillion after accounting for economic growth. Tuesday’s analysis doesn’t attempt to measure any growth caused by the tax cuts, though it says deficit-financed tax cuts tend to increase interest rates and do little for long-term economic growth.

There would be a huge windfall for private equity and hedge funds.

—Leonard Burman of the Tax Policy Center

Mr. Trump has said his tax plan would cost him a fortune and has pointed to his plan to tax carried interest as ordinary income, not capital gains, as a way to raise taxes on some wealthy investment managers, who he said are “getting away with murder” by paying so little.

But carried interest minimizes taxes now because the top capital gains rate of 23.8% is so much lower than the top tax rate on business income of 39.6%, and the gap makes it attractive for private-equity managers to convert ordinary income into capital gains. Under Mr. Trump, capital gains would be taxed at 20% and business income would be taxed at 15%.

“There would be a huge windfall for private equity and hedge funds,” Mr. Burman said.

 

http://www.wsj.com/articles/analysis-of-trumps-tax-plan-shows-big-cuts-in-taxes-federal-revenue-1450807194

Write to Richard Rubin at richard.rubin@wsj.com

About AJ Layon

AJ Layon was, for 28 years, at the University of Florida College of Medicine, in the Division of Critical Care Medicine, in Gainesville, FL. For the past approximately 10 years, until September 2011, he was Professor and Chief of Critical Care Medicine at UF; In September of 2011 he became System Director of Critical Care Medicine in PA. While his interests are primarily related to health care, health care reform, and ethical issues, as a citizen of our United States and our world, he will occasionally opine on issues of our "time and destiny". You are welcome to respond to him at ajlayon@gmail.com.
Gallery | This entry was posted in Accountability, Grossly Unacceptable Excuses, Health Care Reform, History, Politics and tagged , , , , , , , , , . Bookmark the permalink.

One Response to The Trump Tax Plan: Greed Like You’ve Never Seen Before, or “Analysis of Trump’s Tax Plan Shows Big Cuts in Taxes, Federal Revenue”

  1. Pingback: Healthcare Under Trump | Notes from the Southern Heartland

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s