NEW YORK, September 28, 2015– On Monday, Republican presidential candidate and front-runner Donald Trump unveiled his tax plan to “Make America Great Again” at a press conference in New York City.
According to the billionaire reality TV star, too few Americans are working, too many jobs have been shipped overseas, and too many middle class families cannot make ends meet.
Trump says his tax plan directly meets these challenges with four simple goals, in Trump’s own words:
- 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.
- Simplify the tax code to reduce the headaches Americans face in preparing their taxes and let everyone keep more of their money.
- Grow the American economy by discouraging corporate inversions, adding a huge number of new jobs, and making America globally competitive again.
- Doesn’t add to our debt and deficit, which are already too large.
Trump’s plan is progressive, but cuts taxes for all Americans. Trump’s plan contradicts his populist campaign rhetoric of raising taxes on the rich. In fact, even the rich get a big tax cut under Trump’s plan. Trump’s top bracket includes individuals making >$150,001 and couples making >$300,001 would pay a rate of 25 percent, which is a dramatic cut from the current top rate of close to 40 percent.
Who pays what? In Trump’s own words:
- 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.
- 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.
- 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.
- 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.
Trump claims the plan is revenue neutral and will be “fully paid for” by eliminating loopholes for the very rich and corporations. However, details on those loopholes are few and far between. In fact, Trump uses the word loopholes 7 times, but only gives shallow detail on one loophole he’d potentially revise- not eliminate, but revise.
How Trump pays for the cuts? In Trump’s own words:
- Reducing or eliminating most deductions and loopholes available to the very rich.
- 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.
- 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.
Trump says that his plan will simplify the code by making it to where nearly 50 percent of Americans no longer pay a penny of federal income tax. Currently, 51 percent of American households already pay no federal income tax. Trump’s plan also reduces the number of tax brackets from seven to four.
For the full plan, click HERE.