Here's Who Really Wins Donald Trump's 'I Win' Tax Plan | us news

Here’s Who Really Wins Donald Trump’s ‘I Win’ Tax Plan

29 Sep 2015 | Author: | No comments yet »

Donald Trump’s tax plan is great for Donald Trump.

Donald Trump’s position on winning is clear: He’s for it. Republican presidential front-runner Donald Trump on Monday unveiled sweeping proposals to simplify the tax code, slash the corporate tax rate and impose a one-time levy on the overseas earnings of U.S. companies. So it’s perhaps not surprising that Trump himself looks like the biggest winner in his tax plan, which includes a number of changes that would slash taxes for himself, his company, and the children who stand to inherit his fortune. “I fight like hell to pay as little as possible,” Trump said at his press conference announcing the plan on Monday. “Can I say that? In a news conference at Trump Tower in Manhattan, he announced a plan promising populist measures, but at the same time handing a huge tax break to corporate America.

Trump’s plan for an overhaul of the U.S. tax code would eliminate federal income taxes on individuals earning less than $25,000 and married couples earning less than $50,000. Trump said he would cut the top tax rate for all businesses to 15 percent from the present 35 percent if he became president at the November 2016 election. “We have an amazing (tax) code. It will be simple, it will be easy, it will be fair,” he said of his plan, promising “major tax relief for middle income and most other Americans.” Months after unexpectedly taking the lead in opinion polls for the Republican nomination, the real estate mogul has seen his lead narrow in recent days. In addition, Trump would eliminate a 3.8% surcharge on capital gains taxes for wealthy investors created to finance the Affordable Care Act, which provides subsidies to lower and middle income Americans to buy insurance.

Trump estimated that his plan would lead the economy to grow at least 3 percent a year, and as much as 5 or 6 percent — a rate of growth that most economists say is unrealistic. All of these changes would likely benefit people like Trump and businesses like his own in a major way. “The much lower top marginal rate of 25 percent will mean a large cut for the top, even with the limitation on itemized deductions,” Kyle E. Pomerleau, an economist as the conservative Tax Foundation, which is scoring all the GOP plans, told msnbc in an email. “It will also be a cut for those on the bottom, but the cut will be small or minimal. Bush. “It’s full of inconsistencies.” “With the detail we have here, it’s very difficult to see how his plan will close enough loopholes and tax preferences to offset his proposed tax cuts,” said Maya MacGuineas, head of the Campaign to Fix the Debt advocacy group. Trump is claiming a tax increase on wealthy individuals, but I do not believe this will be the case.” There would be some offsets to go with the cuts.

He also said his plan didn’t suit any particular political agenda, describing it as a “common sense approach.” The tax plan is the third major policy proposal from Trump, who has also outlined plans for immigration and guns. He’s proposed a one-time tax of 10% on corporate money stored abroad and ending companies’ ability to defer paying taxes on future overseas earnings, an idea with some support in progressive circles. Trump said some of the country’s “leading scholars, economists and tax experts” helped draw up his plan, but a campaign spokeswoman would not give the names of his tax aides. Trump vowed to eliminate the so-called death tax, formally known as the estate tax, and to simplify voters’ tax returns by reducing the number of tax brackets for individuals to four from seven. The Tax Policy Center think tank, estimated in 2013 that 43 percent of Americans, many of them elderly and poor, would pay no federal income tax that year.

As a result, high earners could try and rearrange their finances in order to exploit the change. “Every wealthy person, whether they have a business or not, now has a huge incentive to at least look like an incorporated business so as to pay the 15% rate instead of the top rate of 25% on income under Trump,” Jared Bernstein, former chief economic adviser to Vice President Joe Biden and a senior fellow at the Center on Budget and Policy Priorities, told msnbc. Businesses would still be saddled with the complex, distorting, and growth-inhibiting “depreciation” regime where an asset is deducted over several or even many years. Far better would be to move to a full-expensing business cash flow model, where all business inputs including investments are deducted in the year spent. This is the famous 47% of Americans that Mitt Romney mentioned in his secret camera tape in 2012, a number that’s dropped slightly since then as the economy’s improved. Many working lower-income families actually get a net gain from the Earned Income Tax Credit, a refundable credit that adds up to a net benefit for millions, which Trump spokeswoman Hope Hicks told msnbc would remain unchanged.

The Tax Foundation pegged the cost of Jeb Bush’s tax plan, for example, which only cut top rates to 28% and corporate taxes to 20%, at $3.6 trillion over 10 years by the Tax Foundation using traditional scoring methods and other analyses found similar price tags. Citizens for Tax Justice, which favors a higher tax burden on the wealthy, estimated that 53% of the cost would go to the richest 1% of taxpayers versus 3% of the cost that would go to the bottom 20%. Instead, they claimed it proved he’d come around to their views. “[Trump’s] tax plan begs the question: Does this mean you were completely wrong about all your liberal policies on taxes, trade, health care, bailouts, and eminent domain?” the group’s president, David McIntosh, said in a statement.

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