Don't Get Excited Over Donald Trump's Tax Plan
Cable news fever dream Donald Trump released his big tax plan this morning after hemming and hawing over the details on last night’s 60 Minutes interview.
The key takeaways:
- Allowing individuals making less than $25,000 a year (or married couples making less than $50,000) to pay no income tax at all.
- Cutting the current highest personal income-tax rate from 39.6 percent to 25 percent.
- An estimated eventual $210 billion in US revenue by imposing a one-time, 10 percent tax on any profits US businesses might be holding overseas.
A lot of the success of Trump’s plan, though, lies on unknowns. For instance, Trump’s assuming that his one-time tax on overseas profits (which he’ll allow to be paid over several years) would encourage major corporations to take their money back to the US. With Trump’s imaginary influx of cash comes brand new theoretical jobs and a theoretical economic boom.
Which isn’t to say that Trump didn’t offer any details at all. From The Wall Street Journal:
The 10% bracket would apply to incomes from $50,000 to $100,000 for a married couple; the current 10% bracket has a ceiling of $18,450. The new 25% top bracket would apply to married couples’ incomes in excess of $300,000, which currently are subject to rates as high as 39.6%. Mr. Trump also would cut the top capital gains rate to 20%, from the current 23.8%. And he would eliminate the alternative minimum tax.
But the candidate doesn’t propose to end taxation of individuals’ investment income, as some other Republicans propose, nor would he expand the standard deduction, child-credit and other middle-class breaks as some other GOP candidates have suggested.
Essentially, the plan does a great job of saying a lot of nice-sounding things that voters (from both sides!) would want to hear. Democrats get to see high-earners and corporations lose some of their loopholes, and Republicans get tax cuts across the board—even on (many) high-earners and businesses.
Despite the fact that it’s being paraded around as a liberal concession by limiting the ways the super wealthy can skirt the law, Trump’s plan cuts the highest tax rate and the capital-gains tax rate, meaning it will lower taxes on most upper class Americans, in exchange for taking a photogenic bite of a tiny handful of the super rich.
In other words, Trump’s policy writers are doing a great job of painting him as a populist without actually straying from Republican ideology. Which is certainly his best bet for votes as long as he plans to finance his own campaign, rather than begging the Koch brothers for handouts like his peers.
But asked if he is simply saying what the people wanted to hear, Trump retorted with: “No, I’m not a populist... I’m a man with great common sense ... I wouldn’t say populist at all. I’d say I’m a man with common sense.”