Thread: Donald Trump unveils plan to slash taxes for the poor -- and the wealthy

Trump's tax cuts could cost U.S. trillions of dollars, experts say

Republican presidential candidate Donald Trump talks about his tax plan in New York.
(Julie Jacobson / Associated Press)

By MICHAEL FINNEGAN AND JAMES F. PELTZ contact the reporters

Republican presidential front-runner Donald Trump proposed a major package of tax cuts on Monday, but offered few specifics on how to pay for them – and experts predicted they would cost untold trillions of dollars.

Trump, who has faced pressure to offer a detailed campaign agenda, vowed to simplify the tax system, with four individual income tax brackets: 25%, 20%, 10% and 0%. The highest of the seven current brackets is 39.6%.

Trump would also lower the 35% corporate rate to 15%. But businesses would lose tax breaks on earnings overseas and various unidentified “loopholes that cater to special interests.”

See the most-read stories this hour >>

Millions of individuals who earn less than $25,000 a year, or couples who make less than $50,000, would no longer pay income tax, Trump said. They would instead send a one-page form to the Internal Revenue Service stating, in characteristic Trump fashion: “I win.”

Trump, the billionaire real estate developer, acknowledged that tax rates on the wealthy would drop, but said his plan would result in a vastly simpler tax code.

“My returns go up to the ceiling and beyond, which is ridiculous,” he told reporters at a news conference in front of the lobby escalator at Trump Tower in Manhattan.

TRAIL GUIDE: All the latest news on the 2016 presidential campaign >>

Beyond his boast, though, how his plan would accomplish any of his predictions remained murky.

Tax experts said it would cost the government trillions of dollars in lost revenue. How many trillions is unknown, they said, because of Trump’s lack of detail on which tax breaks he would wipe out.

“He’s very specific about the nature of the tax cuts, but very vague about the nature of the tax increases,” said Howard Gleckman, senior fellow at the nonpartisan Urban-Brookings Tax Policy Center. “Politicians of both parties have been playing that game forever, and he’s just doing it too.”

Trump’s tax cuts appear to be substantially larger than those recently proposed by his Republican rivals Jeb Bush and Marco Rubio, experts said. The plan also hews closely to standard Republican fiscal policy despite Trump campaign rhetoric that has hinted he might challenge party orthodoxy on taxes.


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It’s clear the cuts would benefit the wealthiest Americans more than anyone else, Gleckman said. Trump’s plan would eliminate the federal inheritance tax, a cut that could produce a windfall for his own children. The tax applies to estates of $5 million or more for individuals, and $10 million or more for couples.

Trump vowed to keep personal income tax deductions for mortgage interest and charitable giving. He also called for abolishing the alternative minimum tax, which was initially aimed at ensuring that the wealthy pay their fair share, but has proved costly to more and more middle-class taxpayers.

At the same time, Trump said he would reduce or eliminate “most deductions and loopholes available to the very rich.” He provided no details.

Elimination of some deductions, like the one for state and local taxes, could adversely affect people in high-tax states such as California, said Edward McCaffery, professor of law, economics and political science at USC.

“The devil is in the unspecified details,” he said.

Get more national political news and the latest from Campaign 2016 >>

Release of Trump’s tax proposal came 12 days after a Republican presidential debate in which Trump was notably less detailed on federal policy than a number of his opponents.

One of the methods Trump proposed to pay for his tax cuts would be to end the deferral of income taxes on corporate profits earned overseas. He would offer a one-time “repatriation” of money held abroad, taxing those earnings at a discounted 10% tax rate. President Obama proposed a similar tax this year, at a 14% rate, and the idea has gotten bipartisan support, though at lower rates than Obama’s plan.

Kyle Pomerleau, an economist at the nonpartisan Tax Foundation in Washington, said it was highly unlikely that the overall plan would cost the government nothing, as Trump asserted.

“Even accounting for additional economic growth from the plan,” he said, “it still wouldn’t be able to claw back the revenue losses.”

For months, Trump hinted that he would break with his party and crack down on tax breaks for Wall Street. His plan does include elimination of the so-called carried interest break that has enabled hedge fund titans and private equity investors like Mitt Romney to pay lower tax rates than the middle class.

But it’s not clear that Trump’s plan would actually raise taxes on the group. Most of their investment income is now taxed at the top 23.8% rate for capital gains. Under Trump’s plan, it would be taxed as ordinary income, at the new top rate of 25%.

Whatever investors earned in ordinary income, currently taxed at 39.6%, would be taxed at a maximum of 25%.

Because much of the other earnings of Wall Street’s richest bankers is already taxed as ordinary income, the net result could be a substantial drop in their overall income taxes.

http://www.latimes.com/politics/la-n...928-story.html

Originally Posted by Judy

Originally Posted by johnwk

Trump's tax plan does nothing to end the failed socialist experiment of laying and collecting a federal tax calculated from profits, gains, salaries and other lawfully earned "incomes". It does nothing to end all the miseries connected with this evil tax.

Real tax reform is found in the following 32 words:

The Sixteenth Amendment is hereby repealed and Congress is henceforth forbidden to lay ``any`` tax or burden calculated from profits, gains, interest, salaries, wages, tips, inheritances or any other lawfully realized money.

Adopting the above words as part of a constitutional amendment would bring us back to our Constitution's ORIGINAL TAX PLAN as our founders intended it to operate!

JWK

The FairTax does this. The states collect the FairTax which is a tariff on new goods and services transactions and requires a repeal of the 16th Amendment by the States within 7 years of passage.

I cannot find what I suggest above contained in the wording of H.R. 25 i.e., proposing to withdraw Congress' power to lay and collect taxes calculated from profits, gains, salaries and other lawfully earned incomes.

I do know if the "fairtax" were adopted the 23 percent tax on articles of consumption and the 23 percent tax upon the sale of labor would go into effect immediately without Congress' power to lay and collect taxes calculated from incomes being withdraw. And then, after a seven year period if the 16th Amendment were not repealed, the assertion is Congress would stop laying the two 23 percent taxes and go back to our existing system. However, there is nothing in the wording of H.R. 25 to the best of my knowledge proposing wording for an amendment to our Constitution to forbid Congress from laying and collecting taxes calculated from profits, gains, salaries and other lawfully earned incomes. And without such wording being stipulated in H.R. 25 Congress would not be obligated to end such taxes even if the 16th Amendment were repealed. Keep in mind the Corporate Excise Tax of 1909 which calculated the amount of tax to be paid from profits and gains was upheld before the 16th Amendment was adopted.

The bottom line is, I can find nothing in H.R. 25 proposing what I suggested above.





JWK

Unspinning the FairTax

We look at the numbers behind the numbers.

• Posted on May 31, 2007 | Updated on June 14, 2007| Corrected on May 31, 2007

19

Summary

In our recent article on the second GOP debate, we called out Gov. Mike Huckabee as well as Reps. Tom Tancredo and Duncan Hunter for their support of the FairTax. We wrote that the bipartisan Advisory Panel on Tax Reform had “calculated that a sales tax would have to be set at 34 percent of retail sales prices to bring in the same revenue as the taxes it would replace, meaning that an automobile with a retail price of $10,000 would cost $13,400 including the new sales tax.” A number of readers pointed out that H.R. 25, the specific bill mentioned by Gov. Huckabee, calls for a 23 percent retail sales tax and not the 34 percent used by the Advisory Panel on Tax Reform. That 23 percent number, however, is misleading and based on some extremely optimistic assumptions. We found that while there are several good economic arguments for the FairTax, unless you earn more than $200,000 per year, fairness is not one of them.

Update June 14: In a letter, Americans for Fair Taxation wrote to say that it disagrees “very strongly” with FactCheck’s analysis of the FairTax. For their objections and our response, see the end of the “Analysis” section.
Analysis

How to Make 30 Look Like 23

Americans for Fair Taxation offers the following plain-language interpretation of H.R. 25:

Americans for Fair Taxation: A 23-percent (of the tax-inclusive sales price) sales tax is imposed on all retail sales for personal consumption of new goods and services.

It is the parenthetical that is important, for it hides the real truth of the tax rate.
First consider the way in which sales tax is normally figured. A consumer good that carries a $100 price tag might be subject to a 5 percent sales tax. That means that the final bill for the item is $105. The 5 percent figure is the amount of tax that is charged on the original purchase price. But now suppose that instead of pricing the item at $100, the shop owner simply priced the item at $105, then sent $5 directly to the state. The $105 price would be a tax-inclusive sales price. But $5 is just 4.8 percent of $105. That 4.8 percent number, however, is relatively meaningless. You are still paying exactly the same 5 percent tax on the item.
The 23 percent number in H.R. 25 is the equivalent of the 4.8 percent in the previous example. To calculate the real rate of the sales tax, we have to determine the original purchase price of an item. We can begin with the same $100 item, keeping in mind that a price tag that reads $100 has sales tax already built in. If our tax rate is 23 percent of the tax-inclusive sales price, then of the $100 final price, $23 of those dollars will be for taxes, meaning that the original pre-tax price of the item is $77. To get $23 in taxes on a $77 item, one must impose a 30 percent tax. In other words, a 23 percent sales tax on the tax-inclusive sales price is equivalent to a 30 percent tax on the actual price of the item.
FairTax proponents object to the 30 percent number, claiming that critics use the larger number to frighten people. Americans for Fair Taxation claims that it uses the tax-inclusive number to make it easier to compare the FairTax to the income tax that it will replace (since most of us think of income tax rates on an inclusive basis). But we are not accustomed to thinking of sales taxes inclusively. The result is that many FairTax supporters (about 15 percent of those who wrote to us, for example) do not understand that the 23 percent figure is tax inclusive.
Our analysis of the FairTax used a figure of 34 percent as the basic exclusive tax rate. One e-mailer complained that our number was at least 10 percentage points “higher than [the FairTax] is” because we calculated it as an addition to retail prices. But our 34 percent number is not 10 percentage points higher than the legislation. A 34 percent exclusive number is equivalent to a 25 percent tax inclusive rate – only 2 percentage points higher than the FairTax bill. We think that, intentional or not, the use of the tax-inclusive 23 percent rate has misled a lot of FairTax proponents.

But 30 Is Not 34 Either

Americans for Fair Taxation, however, has complained that H.R. 25 calls for a 23 percent inclusive (or 30 percent exclusive) rate, not a 34 percent rate. Our number came from thePresident’s Advisory Panel on Tax Reform (scroll to chapter 9 for the panel’s discussion of the FairTax), which calculated that a 34 percent rate on the actual price of consumer goods would be necessary to make the program revenue-neutral. Americans for Fair Taxation has said that the Advisory Panel did not use the FairTax as detailed in the legislation but instead made up its own plan. This complaint is disingenuous. The Advisory Panel did in fact begin with the 30 percent figure that proponents of the FairTax submitted. But the panel rejected those figures, claiming that they were based, at least in part, on the unrealistic assumption that there would be full compliance with the FairTax. In other words, proponents assume that no one will cheat on taxes. However, the Treasury Department estimates that the evasion rate for the entire U.S. tax system under current law is approximately 15 percent. The Advisory Panel accordingly assumed a 15 percent evasion rate for the FairTax.
More significantly, however, the panel found that FairTax supporters were employing questionable accounting. In calculating federal revenue, proponents assumed that purchases made by the federal government would be taxed at the full 30 percent rate. But when calculating federal expenditures, FairTax proponents did not factor in the additional costs of the 30 percent sales tax. The Advisory Panel thus threw out the revenue from federal purchases, noting (correctly) that increased revenue from taxing federal purchases is exactly canceled by increased costs in the federal budget. Unfortunately, the Advisory Panel has thus far refused to release its methodology, making it difficult to reconcile its projections with those of Americans for Fair Taxation.
Using a formula that corrects for the faulty assumption about government spending, William Gale, director of the economic studies program at the Brookings Institute, calculates that a 39.3 percent exclusive rate would be necessary for revenue neutrality. (We used the lower Advisory Panel number). A more recent study by FairTax supporter and Boston University economist Laurence Kotlikoff – working from Gale’s formula and adopting the same basic assumptions – determines that a 31.2 percent exclusive (or 23.8 percent tax-inclusive) rate would be sufficient.
Even if Kotlikoff is correct that a 31.2 percent rate is revenue-neutral, there remains some reason to doubt that the rate actually would be that low. The FairTax proposal assumes a 100 percent tax base on consumption. By way of contrast, most states that have sales taxes have roughly a 50 percent tax base. With the FairTax’s 100 percent base, consumers would pay taxes on a great many things that may not intuitively seem like consumption. The list would include:

• Purchases of new homes
• Rent
• Interest on credit cards, mortgages and car loans
• Doctor bills
• Utilities
• Gasoline (30 percent in addition to current taxes, which would not be repealed)
• Legal fees

At today’s prices, gasoline would cost almost $1 per gallon more. A $150,000 new home would run $195,000 – plus the 30 percent tax that the buyer would pay on the interest on the mortgage. In short, the FairTax taxes everything that one buys, with the one notable exception of education. Any exceptions to the tax base (for instance, eliminating rent or credit card interest from the tax base) would require an offsetting increase in the rate.

But the FairTax Will Lower Prices

Proponents of the FairTax point out that prices on consumer goods contain what are called “hidden taxes.” Under current law, corporations have to pay taxes on their earnings. Moreover, businesses have to pay social security taxes for each employee. The money to pay these taxes has to come from somewhere, and FairTax supporters argue that the cost is passed on to the consumer. In fact, the best-known proponent of the FairTax, talk-show host Neal Boortz, argues that 22 percent of the price of a consumer good is really a “hidden tax.” Get rid of corporate and social security taxes, Boortz argues, and consumer good prices would drop by 22 percent. Even with the 23 percent FairTax, prices stay the same, and with the elimination of income taxes, paychecks will get bigger. Everyone gets a raise and the federal government still gets its revenue. About 10 percent of the e-mail messages we received from FairTax proponents trumpeted this kind of magic act. It is easy to understand the confusion on the issue, as Boortz himself made similar assertions in the hardcover edition of his book. (He later issued a corrected version in paperback.)
A bit of critical analysis shows that this cannot be right. The FairTax is revenue-neutral. That means that for every tax dollar collected under the current system, the FairTax has to collect a dollar. If the FairTax exactly equaled embedded taxes, then it could not possibly be revenue-neutral, since embedded taxes do not take into account personal income or estate taxes. The FairTax rate would have to be high enough to replace embedded taxes plus income and estate taxes.
Chris Edwards, the Cato Institute’s director of tax policy studies, points out that prices do not really matter; corporate, payroll, income and estate taxes currently generate approximately $2.4 trillion, and a revenue-neutral FairTax would still require that taxpayers pony up $2.4 trillion. Nor is it clear that the 22 percent embedded tax figure is particularly meaningful. David Burton, chief economist of the Americans for Fair Taxation, calls it "simplistic" to think that the entire cost of corporate taxes is borne by consumers. Cato’s Edwards suggests that while consumers do pay at least part of the costs, producers also bear some of the burden. That is, employees pay part of the costs of hidden taxes (in the form of lower wages), and corporate shareholders pay another portion (in the form of lower returns on their investments).

The FairTax: Is It Regressive?

Sometimes sales taxes are called regressive, meaning that the poorest pay higher rates than the wealthy. Strictly speaking, sales taxes are flat, since everyone pays the same rate. But because the poor tend to spend a high percentage of their income on basic consumer goods such as food and clothing, sales taxes do require the poor to pay a higher percentage of their income in taxes.
The FairTax plan, however, helps to alleviate this difficulty by exempting sales taxes on all income up to the poverty level. Taxpayers would receive a "prebate," which Edwards calculates to be about $5,600 annually. The Treasury Department estimates that the prebate program would cost between $600 billion and $700 billion annually, making it the largest category of federal spending. Americans for Fair Taxation disputes the Treasury Department numbers, claiming that the actual cost would be closer to $485 billion per year. The Treasury Department has so far refused to release its methodology, making it difficult to determine whose estimate is correct.

Who Really Pays?

With the prebate program in effect, those earning less than $15,000 per year would see their share of the federal tax burden drop from -0.7 percent to -6.3 percent. Of course, if the poorest Americans are paying less under the FairTax plan, then someone else pays more. As it turns out, according to the Treasury Department, “someone else” is everybody earning between $15,000 and $200,000 per year. The chart below compares the share of the federal tax burden for different income groups under the current system and under the FairTax. Those in the highest and the lowest brackets will see their share decrease, while everyone else will see their share of taxes increase.

Americans for Fair Taxation rejects the Treasury Department analysis, objecting that Treasury considers only the income tax. By leaving out payroll taxes (which are actually regressive) Treasury’s chart makes the FairTax look worse by comparison. We found that including all the taxes that the FairTax would replace (income, payroll, corporate and estate taxes), those earning less than $24,156 per year would benefit. AFT’s Burton agreed that those earning more than $200,000 would see their share of the overall tax burden decrease, admitting that “probably those earning between $40[thousand] and $100,000” would see their percentage of the tax burden rise.

Why Be Progressive?

It is easy to look at charts like the one above and dismiss the FairTax as simply another way to help the rich get richer. But there is an economic argument for a less progressive tax system, though that argument is extremely technical. Kotlikoff has asserted that the FairTax will lower the marginal tax rate for all earners. (The marginal rate is the tax rate paid on the last dollar earned.) Because marginal rates are lower, each extra dollar of income will result in greater purchasing power. The decrease in marginal rates is progressive – that is, marginal rate reductions are greater for the working- and middle-classes than for the wealthy.

Moreover, even FairTax critics like Gale agree that consumption taxes increase the size of the economy. Many studies show that long-term incomes would rise under a consumption-based tax system. Optimistic accounts show a 10 percent rise in income over time, but even the more cautious studies show gains of 5 percent to 7 percent. Because the FairTax will grow the economy, workers will eventually see increases in their income. FairTax proponents claim that the growing economy, coupled with the reduction in marginal tax rates, will offset the increased tax burden. Burton argues that "the FairTax is a positive-sum game," one in which purchasing power will grow faster than the tax burden. The size of any such gains is disputed, however; Americans for Fair Taxation consistently chooses from among the most optimistic growth projections.

Upon Further Review

We stand behind our earlier analysis of the FairTax. The proposal to which Gov. Huckabee referred is not a 23 percent tax, but rather a 30 percent tax. And it is revenue-neutral only through an accounting trick. It will collect more money from those earning between $15,000 and $200,000 per year and less from those earning more than $200,000 per year. It is possible that the FairTax would make most people better off, but much of that gain would be a direct result of making the tax code less fair.
— by Joe Miller
Correction, May 31: In the Analysis portion of our original story we stated that "Taxpayers with very low incomes would receive a ‘prebate’." In fact, all taxpayers would receive the prebate for sales taxes on purchases up to the poverty level.
Update June 14: Americans for Fair Taxation wrote us to say that the organization disagrees “very strongly” with FactCheck’s analysis and that we have “uncritically accepted many misleading arguments” made by FairTax critics. As a courtesy to AFT, and as a service to our readers, we are posting the letter in our “Supporting Documents” section. We stand by our article, and our comments on AFT’s letter are below.
Our mission at FactCheck.org is not to rule on issues of public policy but rather to reduce the level of deception and confusion in U.S. politics. We found that, whatever Americans for Fair Taxation’s intentions, there remains much confusion about the FairTax.
AFT disputes our conclusion that the 23 percent number is misleading. We stand behind it. Sales taxes, as AFT notes, “are almost always expressed in an ‘exclusive’ manner,” which in our view makes 30 percent the logical figure to use when describing the FairTax.
We don’t actually call the FairTax “regressive,” as AFT implies that we do. We reiterate, however, that those earning between $15,000 (or perhaps as much as about $24,000 – see our addition to the “Who Really Pays” portion of our article above) and $200,000 per year – virtually all middle-class Americans – would pay a higher share of the tax burden under this proposal. Those earning more would see their share drop, as even AFT economists admit.
We did not ignore Americans for Fair Taxation’s research. Much of that research is publicly available and is listed among our sources. We do, however, approach all evidence with a healthy skepticism – including research that is funded by the very group whose claims we are investigating. Where possible we rely upon neutral sources, such as the bipartisan President’s Advisory Panel on Federal Tax Reform, and on opinions from third-party scholars from think tanks like the Brookings Institution and the Cato Institute.

http://www.factcheck.org/2007/05/uns...g-the-fairtax/

Originally Posted by JohnDoe2

Millions of individuals who earn less than $25,000 a year, or couples who make less than $50,000, would no longer pay income tax, Trump said. They would instead send a one-page form to the Internal Revenue Service stating, in characteristic Trump fashion: “I win.”

This idiotic idea would create a massive and permanent voting block having a vested interest in voting for free government cheese which everyone else would be taxed to finance. This is what the socialist income tax is all about . . . creating a majority voting block that has no skin in the game which will always be there to sell their vote for free government cheese and thus keeps the Establishment in power.

Real tax reform begins with withdrawing Congress' power to lay and collect taxes calculated from incomes and returning to our Constitution's original tax plan.

JWK


If we can make 51percent of America’s population dependent upon an Obama, welfare, food stamp,section 8 housing, college loan check, and now free Obamacare along withFREEBACON, we can blackmail them for their vote, keepourselves in power and keep the remaining portion of America’s productivepopulation enslaved to pay the bills ____ Our WashingtonEstablishment’s Free Cheese Democracy, designed to establish a federalplantation which redistributes wealth that wage earners, business and investorshave worked to create.




.

Originally Posted by johnwk

I cannot find what I suggest above contained in the wording of H.R. 25 i.e., proposing to withdraw Congress' power to lay and collect taxes calculated from profits, gains, salaries and other lawfully earned incomes.

I do know if the "fairtax" were adopted the 23 percent tax on articles of consumption and the 23 percent tax upon the sale of labor would go into effect immediately without Congress' power to lay and collect taxes calculated from incomes being withdraw. And then, after a seven year period if the 16th Amendment were not repealed, the assertion is Congress would stop laying the two 23 percent taxes and go back to our existing system. However, there is nothing in the wording of H.R. 25 to the best of my knowledge proposing wording for an amendment to our Constitution to forbid Congress from laying and collecting taxes calculated from profits, gains, salaries and other lawfully earned incomes. And without such wording being stipulated in H.R. 25 Congress would not be obligated to end such taxes even if the 16th Amendment were repealed. Keep in mind the Corporate Excise Tax of 1909 which calculated the amount of tax to be paid from profits and gains was upheld before the 16th Amendment was adopted.

The bottom line is, I can find nothing in H.R. 25 proposing what I suggested above.





JWK

There is no 23% tax on labor in the FairTax, only new retail goods and services, the same as a tariff.

No, the FairTax doesn't use your wording, it repeals all income based taxes, based on income, profits, earnings, payrolls, estates, capital gains, gifts, interest and dividends, covered by the Internal Revenue Code:

H.R.25
FairTax Act of 2015 (Introduced in House - IH)

TITLE I--REPEAL OF THE INCOME TAX, PAYROLL TAXES, AND ESTATE AND GIFT TAXES

SEC. 101. INCOME TAXES REPEALED.

Subtitle A of the Internal Revenue Code of 1986 (relating to income taxes and self-employment taxes) is repealed.

SEC. 102. PAYROLL TAXES REPEALED.

(a) In General- Subtitle C of the Internal Revenue Code of 1986 (relating to payroll taxes and withholding of income taxes) is repealed.

(b) Funding of Social Security- For funding of the Social Security Trust Funds from general revenue, see section 201 of the Social Security Act (42 U.S.C. 401).

SEC. 103. ESTATE AND GIFT TAXES REPEALED.

Subtitle B of the Internal Revenue Code of 1986 (relating to estate and gift taxes) is repealed.

http://thomas.loc.gov/cgi-bin/query/...4tD8DRp:e7163:

No, if the 16th Amendment is not repealed, then the Sunset Provision is subject to Congressional action, not an automatic return to the existing system, which would no longer exist. They would have to pass a new system or extend the Sunset Provision. The reason the Sunset Provision concerning the 16th Amendment repeal was added a few years ago was to satisfy people like you because they didn't realize that people like you will never support the FairTax so it was a wasted use of ink and paper to add it. A repeal of the 16th Amendment is not needed, though helpful, it is not necessary, even though the sponsors intend and intended all along to pass a 16th Amendment Repeal and get it off to the states.

The FairTax does not repeal the excise tax because it's not part of the income tax laws being repealed. It's an excise tax, a privilege or luxury tax for operating as a public corporation with shareholders, and although I believe it will also be repealed at some point as it should be, it's not repealed as an income tax because it's an excise tax and only applies to corporations. It's 1% of income over $50,000. It would have been wise my view to have included it so people like you with concerns about it wouldn't have anything to gripe about, but it's a separate law with a different legal basis, so I guess that's why they didn't include it.

It's nice to see you still at it, JohnWK. Been about 10 years now? Seeing you pop up again is like seeing an ole adversary still around kicking the same ole dead horse while the country sinks and a reminder that nothing has changed and nothing has been fixed.

Originally Posted by johnwk

This idiotic idea would create a massive and permanent voting block having a vested interest in voting for free government cheese which everyone else would be taxed to finance. This is what the socialist income tax is all about . . . creating a majority voting block that has no skin in the game which will always be there to sell their vote for free government cheese and thus keeps the Establishment in power.

Real tax reform begins with withdrawing Congress' power to lay and collect taxes calculated from incomes and returning to our Constitution's original tax plan.

JWK


If we can make 51percent of America’s population dependent upon an Obama, welfare, food stamp,section 8 housing, college loan check, and now free Obamacare along withFREEBACON, we can blackmail them for their vote, keepourselves in power and keep the remaining portion of America’s productivepopulation enslaved to pay the bills ____ Our WashingtonEstablishment’s Free Cheese Democracy, designed to establish a federalplantation which redistributes wealth that wage earners, business and investorshave worked to create.




.

Well, the FairTax solves that problem, JohnWK, but people like you have done enough damage to keep the income tax in place with all its inequities and harm. So, keep it up! We'll soon be the World's Largest Banana Republic in another year or two and Greece will look good by comparison.

Originally Posted by Judy

https://www.donaldjtrump.com/positions/tax-reform

Trump should have made the FairTax his plan.

FairTax Act of 2015: HR 25 in the US House of Representatives and S 155 in the US Senate.

TAX REFORM THAT WILL MAKE AMERICA GREAT AGAIN

The Goals Of Donald J. Trump’s Tax Plan
Too few Americans are working, too many jobs have been shipped overseas, and too many middle class families cannot make ends meet. This tax plan directly meets these challenges with four simple goals:

1. Tax relief for middle class Americans: In order to achieve the American dream, let people keep more money in their pockets and increase after-tax wages.
2. Simplify the tax code to reduce the headaches Americans face in preparing their taxes and let everyone keep more of their money.
3. Grow the American economy by discouraging corporate inversions, adding a huge number of new jobs, and making America globally competitive again.
4. Doesn’t add to our debt and deficit, which are already too large.

The Trump Tax Plan Achieves These Goals

1. If you are single and earn less than $25,000, or married and jointly earn less than $50,000, you will not owe any income tax. That removes nearly 75 million households – over 50% – from the income tax rolls. They get a new one page form to send the IRS saying, “I win,” those who would otherwise owe income taxes will save an average of nearly $1,000 each.
2. All other Americans will get a simpler tax code with four brackets – 0%, 10%, 20% and 25% – instead of the current seven. This new tax code eliminates the marriage penalty and the Alternative Minimum Tax (AMT) while providing the lowest tax rate since before World War II.
3. No business of any size, from a Fortune 500 to a mom and pop shop to a freelancer living job to job, will pay more than 15% of their business income in taxes. This lower rate makes corporate inversions unnecessary by making America’s tax rate one of the best in the world.
4. No family will have to pay the death tax. You earned and saved that money for your family, not the government. You paid taxes on it when you earned it.

The Trump Tax Plan Is Revenue Neutral
The Trump tax cuts are fully paid for by:

1. Reducing or eliminating most deductions and loopholes available to the very rich.
2. A one-time deemed repatriation of corporate cash held overseas at a significantly discounted 10% tax rate, followed by an end to the deferral of taxes on corporate income earned abroad.
3. Reducing or eliminating corporate loopholes that cater to special interests, as well as deductions made unnecessary or redundant by the new lower tax rate on corporations and business income. We will also phase in a reasonable cap on the deductibility of business interest expenses.

DETAILS OF DONALD J. TRUMP’S TAX PLAN
America needs a bold, simple and achievable plan based on conservative economic principles. This plan does that with needed tax relief for all Americans, especially the working poor and middle class, pro-growth tax reform for all sizes of businesses, and fiscally responsible steps to ensure this plan does not add to our enormous debt and deficit.
This plan simplifies the tax code by taking nearly 50% of current filers off the income tax rolls entirely and reducing the number of tax brackets from seven to four for everyone else. This plan also reduces or eliminates loopholes used by the very rich and special interests made unnecessary or redundant by the new lower tax rates on individuals and companies.
The Trump Tax Plan: A Simpler Tax Code For All Americans
When the income tax was first introduced, just one percent of Americans had to pay it. It was never intended as a tax most Americans would pay. The Trump plan eliminates the income tax for over 73 million households. 42 million households that currently file complex forms to determine they don’t owe any income taxes will now file a one page form saving them time, stress, uncertainty and an average of $110 in preparation costs. Over 31 million households get the same simplification and keep on average nearly $1,000 of their hard-earned money.
For those Americans who will still pay the income tax, the tax rates will go from the current seven brackets to four simpler, fairer brackets that eliminate the marriage penalty and the AMT while providing the lowest tax rate since before World War II:

Income Tax Rate	Long Term Cap Gains/ Dividends Rate	Single Filers	Married Filers	Heads of Household
0%	0%	$0 to $25,000	$0 to $50,000	$0 to $37,500
10%	0%	$25,001 to $50,000	$50,001 to $100,000	$37,501 to $75,000
20%	15%	$50,001 to $150,000	$100,001 to $300,000	$75,001 to $225,000
25%	20%	$150,001 and up	$300,001 and up	$225,001 and up

With this huge reduction in rates, many of the current exemptions and deductions will become unnecessary or redundant. Those within the 10% bracket will keep all or most of their current deductions. Those within the 20% bracket will keep more than half of their current deductions. Those within the 25% bracket will keep fewer deductions. Charitable giving and mortgage interest deductions will remain unchanged for all taxpayers.
Simplifying the tax code and cutting every American’s taxes will boost consumer spending, encourage savings and investment, and maximize economic growth.
Business Tax Reform To Encourage Jobs And Spur Economic Growth
Too many companies – from great American brands to innovative startups – are leaving America, either directly or through corporate inversions. The Democrats want to outlaw inversions, but that will never work. Companies leaving is not the disease, it is the symptom. Politicians in Washington have let America fall from the best corporate tax rate in the industrialized world in the 1980’s (thanks to Ronald Reagan) to the worst rate in the industrialized world. That is unacceptable. Under the Trump plan, America will compete with the world and win by cutting the corporate tax rate to 15%, taking our rate from one of the worst to one of the best.
This lower tax rate cannot be for big business alone; it needs to help the small businesses that are the true engine of our economy. Right now, freelancers, sole proprietors, unincorporated small businesses and pass-through entities are taxed at the high personal income tax rates. This treatment stifles small businesses. It also stifles tax reform because efforts to reduce loopholes and deductions available to the very rich and special interests end up hitting small businesses and job creators as well. The Trump plan addresses this challenge head on with a new business income tax rate within the personal income tax code that matches the 15% corporate tax rate to help these businesses, entrepreneurs and freelancers grow and prosper.
These lower rates will provide a tremendous stimulus for the economy – significant GDP growth, a huge number of new jobs and an increase in after-tax wages for workers.
The Trump Tax Plan Ends The Unfair Death Tax
The death tax punishes families for achieving the American dream. Therefore, the Trump plan eliminates the death tax.
The Trump Tax Plan Is Fiscally Responsible
The Trump tax cuts are fully paid for by:

1. Reducing or eliminating deductions and loopholes available to the very rich, starting by steepening the curve of the Personal Exemption Phaseout and the Pease Limitation on itemized deductions. The Trump plan also phases out the tax exemption on life insurance interest for high-income earners, ends the current tax treatment of carried interest for speculative partnerships that do not grow businesses or create jobs and are not risking their own capital, and reduces or eliminates other loopholes for the very rich and special interests. These reductions and eliminations will not harm the economy or hurt the middle class. Because the Trump plan introduces a new business income rate within the personal income tax code, they will not harm small businesses either.
2. A one-time deemed repatriation of corporate cash held overseas at a significantly discounted 10% tax rate. Since we are making America’s corporate tax rate globally competitive, it is only fair that corporations help make that move fiscally responsible. U.S.-owned corporations have as much as $2.5 trillion in cash sitting overseas. Some companies have been leaving cash overseas as a tax maneuver. Under this plan, they can bring their cash home and put it to work in America while benefitting from the newly-lowered corporate tax rate that is globally competitive and no longer requires parking cash overseas. Other companies have cash overseas for specific business units or activities. They can leave that cash overseas, but they will still have to pay the one-time repatriation fee.
3. An end to the deferral of taxes on corporate income earned abroad. Corporations will no longer be allowed to defer taxes on income earned abroad, but the foreign tax credit will remain in place because no company should face double taxation.
4. Reducing or eliminating some corporate loopholes that cater to special interests, as well as deductions made unnecessary or redundant by the new lower tax rate on corporations and business income. We will also phase in a reasonable cap on the deductibility of business interest expenses. https://www.donaldjtrump.com/positions/tax-reform

Yeah, I know, I've read it several times. It's just another tweek of the income tax code. There will still be 77,000 pages of code no one understands, everyone will still have to file tax returns and in many cases if not most cases hire an accountant or tax preparation company to file, everyone will still have to report all their personal and business income and private financial affairs to strangers in the IRS, it won't bring our companies back home, the income tax is the primary reason they left, it won't bring investment back, why bring it home to pay income tax when you don't have to where you are even though you may have to pay 10%, that's still better than 15% and that may not even be legal if the income doesn't come into the country, it won't help fix the free trade treason problem, it won't help fix the illegal alien problem (most of them will owe no tax), it will create some jobs at home because all the rates are low which stimulates the economy, so there will be more profit to reinvest here, and it will help the economy and create a lot of new jobs.

So, it's not all bad, it has some good features, it's just not the cure-all of all the problems with the income tax code including the major issue of compliance, that the FairTax Plan is, so I'm very disappointed.

The reaction so far to Trump's Plan seems to be very good. Fox News Panels, several of them, all gungho and excited. CNN News Panels, all positive, except for 1 guy from the New York Times who thought it would increase the deficit by $1 billion but he doesn't like Trump and when asked how he could document that, he couldn't. Good reviews by Forbes, not without some complaints or "wish he'd dones", but over all, "pro-growth" and rated very high. This is a break for Forbes, because for some reason all their articles to date have been anti-Trump, but there are 3 positive ones today due to his tax plan.

Donald Trump Announces Universal Government Healthcare Plan