Earlier this September, Donald Trump, in his “typical staccato style,” threw out a few preliminary ideas about tax reform. The part that drew the most attention was Trump’s assertion that America’s rich should pay higher taxes.
Now, we have further proof that Trump is becoming more and more like the professional politicians he so often lambasts. Trump’s campaign released a document setting forth “the goals of Donald Trump’s tax plan,” cheerfully titled, “Tax Reform that Will Make America Great Again.”
Spoiler alert 1: There are no great surprises here.
Spoiler alert 2: Don’t worry about that whole “the rich should pay more taxes” thing.
Trump’s plan centers around “simplifying” the tax law (I am still searching for a candidate running on a “more complexity” platform). He would get many taxpayers off the tax rolls altogether by raising the standard deduction, a play out of Ronald Reagan’s playbook. Rates would come down to a top rate of 25% (now 39.6%) on individuals. Trump would repeal the alternative minimum tax (AMT), an annual headache for tens of millions of taxpayers (mainly high wage earners in high tax states like California, Illinois and New York), along with the “death tax,” a tax easy enough to oppose. On the business side, Trump would again lower rates (from 39 to 15%), to stir business and create a “huge number” of jobs.
How to pay for all this in a time of mounting deficits? No worries: The plan is “fiscally responsible” and “revenue neutral” because it will eliminate “deductions and loopholes available to the very rich,” but not, of course, including the mortgage interest or charitable contribution deductions.
What’s left to eliminate? Trump doesn’t say, but it’s a good bet that it includes the deduction for state and local taxes, which the AMT is now taxing anyway. Trump also claims he will bring in hordes of revenue by a “one-timed deemed repatriation of corporate cash held overseas.” It is hard to know exactly what that even means — Trump is still leaving the details to offstage devils whom we may never meet — but, apparently, this “one time” tax on cash accounts will magically balance the books.
All of these ideas have floated around various desktops inside the Beltway for some time now. This is cut-and-paste tax policy. Like his fellow Republicans, Trump is almost certainly playing fast and loose with the math of the matter — a whiff of voodoo is in the air. We cannot count on lower rates and more revenue as a handy combination of phrases to avoid actual thinking and making hard decisions about tax and spending systems.
There is however one thing we can keep counting on — the rich are not going to see their taxes raised by one Donald Trump. It’s still morning in America for the wealthy.
Meanwhile, as we are waiting (maybe forever) for the missing details, we can give The Donald some credit for throwing out ideas weeks earlier about fixing America’s flawed tax system. He tried, however briefly. (You can ready my previous op-ed about Trump’s tax ideas.)