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

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

By MJ Lee, CNN Politics and Finance Reporter
Updated 11:13 AM ET, Mon September 28, 2015 | Video Source: CNN

New York (CNN)Donald Trump is vowing to drastically cut income taxes for millions of Americans across the wealth spectrum while casting aside loopholes popular on Wall Street.

"It will provide major tax relief for middle income and for most other Americans. There will be a major tax reduction," Trump said Monday at a press conference at Trump Tower in New York as he unveiled his plan to revamp the tax code. "It'll simplify the tax code, it'll grow the American economy at a level that it hasn't seen for decades."

The highly anticipated tax plan comes as Trump is being pressed to provide more details about how his administration would govern.

One of the biggest beneficiaries appears to be families that draw the smallest paychecks, who Trump said would pay no income taxes under his plan. However, the proposal would also be a boon for the wealthiest Americans like Trump -- the top bracket includes couples making more than $300,000 -- who would pay an income tax rate of 25%, according to the Wall Street Journal. That's a drastic cut from the current top rate of close to 40%.

The tax cuts for top earners could open Trump up to charges of hypocrisy. The real estate magnate has surged to the top of the polls by touting a populist tone, lamenting that wealthy people like himself should pay more.

But the most pressing question that Trump must answer is how he would raise enough revenue to offset his plan's drastic tax cuts.

The candidate says he would make up for the difference in a number of ways: killing certain deductions for the rich and creating incentives for U.S. companies to bring back cash currently held overseas, thereby boosting growth at home.

Trump's tax plan broadly mirrors that of one of his main rivals: Jeb Bush.

Bush's proposal released this month also reduces the number of income tax brackets -- to three from the current seven. The highest tax bracket under the former Florida governor's plan is 28%, and the lowest is 10%. Bush also proposed lowering the corporate tax rate, from 35% to 20% -- another popular idea among conservatives.

Like Bush, one loophole Trump would target is the preferential treatment for carried interest, which is a share of profits paid to investment managers.

Since launching his White House campaign in June, Trump has made sweeping attacks on hedge fund managers who are paid in carried interest.

Trump, who claims that his personal assets are valued at more than $10 billion, frequently makes the distinction between investors who work in real estate and those on Wall Street. Hedge fund managers, he often says, fall in the category of special interests backing some of his well-connected and best-funded rivals.

"I know them. They all are supporting Jeb Bush and Hillary Clinton," Trump told CNN at a campaign stop in Nashville, Tennessee, last month. "They make a lot of money and a lot of it is luck. They pick a stock and all of a sudden they make a lot of money. I want the hedge fund guys to pay more taxes."

The tax rate of hedge fund managers is a favorite political target for the 2016 presidential candidates.

"We will treat all noninvestment income the same, so unless you stake capital in an investment, you won't be able to claim the capital-gains tax rate on your market gains," Bush's tax proposal said.

It's also popular rallying cry for the Democratic candidates.

Former Secretary of Hillary Clinton has been hitting Wall Street tax breaks since the first days of her campaign, as she's faced pressure from progressive Democrats to embrace a more populist agenda.

Antagonism towards Wall Street is a central message of Clinton's rivals like Vermont Sen. Bernie Sanders and former Maryland Gov. Martin O'Malley.

http://www.cnn.com/2015/09/28/politi...lan/index.html

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.

9/27/15

http://www.alipac.us/f12/donald-trum...ork%92-323779/

Pelley asked Trump what he plans to do with the 11 or 12 million illegal immigrants that are in the country.
Trump answered, “If they’ve done well, they’re going out and they’re coming back in legally.”

Trump vows drastic tax cuts

Billionaire's tax proposal would be boon for wealthiest

http://www.cnn.com/

These new headlines have been added to the CNN Homepage.

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

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.

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.

Why?

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.