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Trump Tax Plan: Massive Tax Cuts For 1%, Trillions Added To Deficit

As we've already learned, tax cuts don't do a thing for the economy.
Trump Tax Plan: Massive Tax Cuts For 1%, Trillions Added To Deficit
Image from: Gage Skidmore

The same people who have been screaming about deficits for decades won't even remember as they embrace Trump's budget-busting economic plan. Because elections are about emotional triggers, not common sense. Via the New York Times:

Donald J. Trump’s tax plan would benefit the wealthiest Americans the most while saddling the economy with trillions of dollars in new debt, according to an analysis released on Tuesday by the Tax Policy Center.

Mr. Trump, the Republican presidential candidate who is leading most polls,released his plan in September after vowing to crack down on loopholes that benefit rich hedge fund and private equity managers, while eliminating provisions that encourage companies to park their cash in overseas tax havens.

The proposal would cut the top tax rate to 25 percent from 39.6 percent, and bring down the corporate tax rate to 15 percent from 35 percent. It would also end federal income taxes on individuals making less than $25,000 and married couples who file their taxes jointly earning less than $50,000.

Despite the populist tone of his campaign, Mr. Trump’s plan appears to open new loopholes that would allow the well-off to shave their tax bills and could debilitate the economy as lawmakers look for requisite spending cuts. According to analysts at the nonpartisan Tax Policy Center, the cuts would mean nearly $25 trillion in lost government revenue over the next 20 years, and swell the ratio of debt to gross domestic product from about 74 percent to 180 percent.

“The revenue losses from this plan are really enormous,” Len Burman, director of the Tax Policy Center, said on a conference call before releasing the report. “Basically it would negate all the economic benefits if we were running deficits anywhere near as large as we’re projecting here.”

[...] While Mr. Trump said that billionaires like himself would be hit the hardest under his plan, the Tax Policy Center disagrees. It calculates that high income taxpayers get the biggest cuts in dollar terms and as a share of their income. The richest 0.1 percent would receive an average tax cut of $1.3 million in 2017, or 19 percent of their after-tax income, while the average cut for everyone would be about $5,100, or 7 percent of their pay.

“Donald Trump hasn’t released his tax returns, but people in his income group would get huge tax cuts,” Mr. Burman said.

The biggest loophole in the Trump tax plan, according to Roberton Williams of the Tax Policy Center, is the “pass through” provision that would allow contract workers to have their income taxed at the lower 15 percent rate. When Kansas made such an allowance recently, thousands of workers shifted their work status to cut their tax bills, leading to a revenue shortfall.

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