Trump’s tax plan benefits Trump’s finances
Published 3:36 pm Saturday, September 30, 2017
Trump says that under his tax plan “He and other wealthy Americans wouldn’t personally benefit.” Trump is being disingenuous. An unkind person — like me — would say that he is lying. Practically every aspect of his tax plan is aimed at reducing the tax burden on the wealthy.
First, he proposes to eliminate the inheritance tax, which is only levied on estates greater than $5.5 million. To have an estate that large, one would have to be in the top 1 percent of Americans. By the way, Trump claims to be worth $10 billion, so eliminating the inheritance tax would save his heirs some $4 billion.
He plans to reduce the top marginal rate from 39.6 percent to 35.0 percent, a reduction of 12 percent! Once again only wealthy people defined as those in the $500,000 per year income bracket would benefit. On the flip side, those currently in the 10-percent bracket would see their tax rate increased to 12 percent, for a 20-percent increase in their tax liability.
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The Republicans propose to reduce the corporate income tax from 35 percent to 20 percent, for a reduction of 43 percent. By the way, practically no corporation pays 35 percent! Twenty percent of large corporations like Pfizer, GM and Exxon pay nothing and even get tax credits!
Also included is a plan to create a “pass-through” tax rate of 25 percent for certain corporations. This would limit the maximum tax rate applied to the business income of businesses conducted as sole proprietorships, partnerships and S corporations. Currently much of this income would be taxed at 39.6 percent, so this would be a 37-percent reduction. Many of Trump’s corporations fall into this category.
Trump proposes eliminating the Alternative Minimum Tax, which was created to keep wealthy Americans from avoiding taxes. In the one year (2005) for which we have Trump’s tax return, eliminating the AMT would have saved him $31 million.
Trump says that his proposed tax plan would not personally benefit him. Actually, it appears that the plan was designed specifically to reduce the tax liabilities of the Trump family.
This tax plan would also increase the budget deficit “’ugely!”