On Wednesday Donald Trump unveiled an ambitious tax plan, proposing sweeping tax cuts for individuals and corporations in what the president dubbed a “once-in-a-generation” opportunity to overhaul America’s tax code.
“These tax cuts are significant. There’s never been tax cuts like what we’re talking about,” Trump said in characteristically grandiose fashion.
“We will make taxes simple, easy, and fair for all Americans.”
Significant, yes. Fair for all Americans? No. Great for the wealthy? You bet.
The individual tax rates would be 12%, 25% and 35% – and the plan recommends a surcharge for the very wealthy. But it does not set the income levels at which the rates would apply, so it is unclear just how much of a tax cut would go to a typical family.
Trump insisted the tax plan would not benefit the “wealthy or well-connected”, stating: “They can call me all they want, it’s not gonna help.”
The wealthy would only be calling Trump to thank him for his generosity. They’ll be great calls. The best calls. The most calls. The most fabulous calls.
There are also signs that the wealthiest sliver of Americans could still reap tremendous benefits from the proposed changes, even though Trump has suggested that the rich will not be better off. Ya. Right.
Trump also dedicated a considerable portion of his remarks in Indiana to railing against the estate tax, which he referred to as the “death tax” and would be eliminated under his plan. Such a move would primarily benefit top earners, including the president.
“We’re finally ending the crushing, horrible unfair disaster of the estate tax,” Trump said.
The tax in question applies to estates valued at more than $5.49m for individuals or $10.98m for married couples. According to the Tax Policy Center, a research group based in Washington, just 0.2% of estates of people who died were subject to the tax, which currently stands at a rate of 40% under the law.
Trump and Republicans in Congress have argued the estate tax has a crippling effect on family farms, ranches and small businesses. But a Tax Policy Center analysis of the year 2013 found only 3% of the 0.2% of the estates subject to the tax were farms and businesses.
3% of 0.2% isn’t exactly what some people would say is a “crushing, horrible unfair disaster”.
By contrast, a review by Bloomberg revealed huge savings for Trump and his cabinet, which is regarded as the wealthiest in US history.
Trump’s estate would save $564m, the review found, based on his estimated net worth of $3bn. Trump claims his net worth to be at least $10 bn, but he has refused to release his tax returns in a break from precedent, making it difficult to fully evaluate how Trump’s tax plan as president would affect him personally.
According to the Bloomberg analysis, a repeal of the estate tax would save Trump’s commerce secretary, Wilbur Ross, roughly $545m and potentially result in more than $900m in savings for Richard DeVos, the father-in-law of Betsy DeVos, Trump’s education secretary.
Trump’s phone is going to be ringing off the hook. They’ll be great calls. The best calls. The most calls. The most fabulous calls. Believe me.
Corporations would see their top tax rate cut from 35% to 20%. For a period of five years, companies could further reduce how much they pay by immediately writing off their investments.
New benefits would be given to firms in which the profits double as the owners’ personal income. They would pay at a 25% rate, down from 39.6%. This creates a possible loophole for rich investors, lawyers, doctors and others, but administration officials say they will design measures to prevent any abuses. Ya. Right.
Read the complete article on The Guardian newspaper web site.
More on Trump’s tax plan:”Trump’s tax proposal would push US below Greece on inequality index”