Trump Plan Is Tax Cut for the Rich, Even Hedge Fund Managers

28 Sep 2015 | Author: | No comments yet »

Donald Trump is the glib hero the right has been waiting for: What his “60 Minutes” interview revealed about his terrifying appeal.

The billionaire front-runner for his party’s presidential nomination has been promising to make “hedge fund guys” pay more by eliminating the carried-interest deduction, which taxes private equity and hedge fund profits at 23.8 percent. NEW YORK — Republican presidential frontrunner Donald Trump unveiled a plan Monday that would drastically overhaul the U.S. tax system if he’s elected to the White House — eliminating federal income taxes for millions of Americans and reducing them for everyone else, including the wealthy.Speaking at at Trump Towers in New York, the businessman said his plan would provide “major tax relief for middle-income and for most other Americans,” but without giving specifics on how that tax relief would work. “There will be a major tax reduction,” he said. “It’ll simplify the tax code, it will grow the American economy in a level that it hasn’t seen in decades.” Trump called for the poorest Americans to pay no federal taxes at all. But Trump’s plan also reduces the top income tax bracket on the wealthiest Americans to 25 percent from 39.6 percent, effectively minimizing the hike that the real estate celebrity has spent months promoting.

Donald Trump has enjoyed his substance-free campaign for president (as have a third of the Republican Party), but now he’s ready to get down to business. The billionaire businessman said he will partially pay for the plan by reducing or eliminating corporate loopholes and deductions that are often utilized by the country’s wealthiest citizens. According to a leading tax expert I spoke to today, it would probably result in a tax cut, possibly a very large one, for many of the highest earners.

In a wide-ranging interview with “60 Minutes” last night, Trump was peppered with questions from Scott Pelley about the specifics of his America-enhancing plans. Trump’s plan would reduce the number of tax brackets to three from seven; former Florida Governor Jeb Bush suggested three (slightly higher) tax brackets earlier this month. Trump is offering his plan amid criticism that he’s risen to the top of Republican primary polls based on tough-on-immigration rhetoric instead of specific policy proposals. Senator Marco Rubio has proposed abolishing the alternative minimum tax and ending all deductions, save those on charitable giving and mortgage interest; Trump would do the same.

It’s a move Trump says removed more than 75 million households — or 50 percent of households in the country — from the income tax rolls. • Every other American will see a “simpler” tax code with four brackets — 0 percent, 10 percent, 20 percent, and 25 percent — instead of the current seven brackets. • No business in the U.S. will pay more than 15 percent of their business income in taxes — “from a Fortune 500 to to a mom-and-pop shop to a freelancer living job to job,” the plan says. But married couples earning more than $300,000 would pay a new income tax rate of 25 percent, rather than the current top rate of 40 percent. • The plan includes “a one-time deemed repatriation of corporate cash held overseas at a significant discounted 10 percent rate.” It also ends the deferral of taxes on corporate income earned abroad. It’s a pledge that’s sure to raise skepticism among debt experts given that discretionary government spending, as a percentage of gross domestic product, is already at its lowest level since Dwight D. Grover Norquist, the conservative group’s president, said in a statement that Trump’s plan is “certainly consistent with the Taxpayer Protection pledge.” Trump’s tax plan release comes as he is still leading in the polls for the Republican nomination. Rubio’s plan to slash taxes on investments, wages, and business income would reduce collections by $1.7 trillion during the same time, while, like Bush, largely favoring the top 1 percent of Americans over the middle class.

They’re incredibly stupid, but together they offer a glimpse of Trump’s big (and very specific) plan to make America great again: On singlehandedly reversing the process of globalization: “We’re gonna grow the economy so much…If the economy grows the way it should grow, if I bring jobs back from China, from Japan, from Mexico, from so many countries, everybody’s taking our jobs.” On immigration and deporting over 10 million Mexicans: “We’re rounding them up in a very humane way, a very nice way. I don’t see anything in the plan that indicates there would be a large reduction enough in those preferences.” The plan “doesn’t appear to make the rich pay any more, and what detail we have suggests they would probably pay less,” Williams said. “From the looks of it, they would do very well. But without the details, we can’t say for sure.” To be sure, Williams noted, at his presser today, Trump (just like some of his rivals have done) vowed that his tax cuts would unleash spectacular economic growth, which he presumably believes would bring in enough revenues to ensure revenue-neutrality. I know it doesn’t sound nice, but not everything is nice.” On fixing health care without paying for it: “Obamacare’s going to be repealed and replaced.

Or, as his plan posted online said, “They get a new one page form to send the IRS saying, ‘I win.’” Closing loopholes such as carried interest would fall in line with “basic conservatism and Republican orthodoxy,” economist Stephen Moore said in an interview prior to Trump’s news conference. “If Trump’s plan is going to sell with supply-side economists, the tax rates across the board are going to have to come down,” said Moore, who has consulted with Paul and Bush on their tax plans and said he spoke to Trump’s team about six weeks ago. Marco Rubio’s plan also contains middle class tax relief, but it eliminates taxes on capital gains, dividends and estates, which would result in what some experts describe as a hugely regressive, revenue-draining tax cut.

If so, then the temporary threat posed by the billionaire’s soak-the-rich talk — that there might be a genuine outlier of a tax plan from a Republican candidate, forcing a GOP debate that challenged party dogma on the imperative of slashing the tax burden at the top — will have been averted. On the CBS program, Trump also said he would increase taxes on Chinese imports if the country continues to devalue its currency, and would tax products made by companies that moved operations overseas to take advantage of lower rates. Because, you know, every agreement has an end.” On letting ISIS take over another country before allowing Russia to deal with it: “I would end ISIS forcefully…Now let me just say this, ISIS in Syria, Assad in Syria, Assad and ISIS are mortal enemies…Why aren’t we letting ISIS go and fight Assad and then we pick up the remnants?…We’re fighting ISIS and Assad has to be saying to himself, ‘They have the nicest and dumbest people that I’ve ever imagined’…Russia wants to get rid of ISIS. And I’ve no doubt that his supporters will love every insanely idiotic thing he said, not because of what it means (or doesn’t mean) but because of how cocksuredly he said it. Years ago Stephen Colbert created a character to lampoon the most hysterical pathologies of the right: the braggadocio, the blinkered thinking, the nativism, the love of truth without the facts.

The Republicans who love him love him precisely because he says what they think, only he says it in a better suit and on a bigger stage – and that, it seems, is enough.

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