Trump’s tax plan: Who would benefit?

During his campaign for president, Donald Trump promised
that if elected he’d raise taxes on the rich, himself
most definitely included. “It’s going to cost me a
fortune—which is actually true,” Trump told reporters
in late 2015. Well, guess what? said Jonathan Chait in
NYMag.com. It was “not actually true.” Last week, in a
scramble for achievements ahead of the symbolic 100-day
milestone, the Trump White House released a single-page,
bullet-pointed tax plan that is effectively just a “massive
tax cut for the rich,” himself in particular.
The tax rate on corporations and so-called
pass-through businesses (such as Trump’s
own) would be slashed from 35 percent to
15 percent, saving Trump tens of millions
each year. He would also scrap the Alternative Minimum Tax,
which cost Trump $31 million in 2005, and the Estate Tax, which
by itself would save the Trump family up to $4 billion, if the
patriarch is really worth the $10 billion he claims. If all of his proposed
tax cuts are passed, Trump will add an incredible $7 trillion
to the deficit over a decade. Even more shocking than the naked
self-interest, said E.J. Dionne in The Washington Post, is that
Trump campaigned as a champion of the working poor. In reality,
Trump’s views on taxation are “about as ‘populist’ as the membership
list at Mar-a-Lago.”
When liberals howl this way, said Kimberley Strassel in WSJ
.com, that’s when you “know a Republican president has scored
big on a proposed tax reform.” What Trump has laid out in
this succinct document is a “swashbuckling vision for enacting
pro-growth principles.” A steep cut to the U.S. corporate tax
rate—currently the highest in the developed world—will open
the floodgates to foreign investment. His proposal to double the
standard deduction and simplify the personal tax code into three
income brackets—10, 25, and 35 percent—will provide tax
relief for millions of lower- and middle-income families. And
the plan won’t explode the deficit, said John Steele Gordon
in CommentaryMagazine.com. These cuts, if enacted, will
“supercharge the economy, offsetting much of the revenue
lost through lower rates.”
Some myths never die, said Steven Rattner in NYTimes
.com. Since the days of Ronald Reagan, the GOP
has been in thrall to this “alchemistic belief
that huge tax cuts can pay for themselves
by unleashing faster economic growth.”
There’s little empirical evidence for this
“magical thinking”—at most, studies show,
about 30 percent of revenue lost in a tax cut will ever be recouped
through resulting growth—but there was Treasury Secretary Steven
Mnuchin last week again nonsensically assuring reporters that
Trump’s plan will “pay for itself.” Even for Trump, the deception
and delusion is mind-boggling, said Paul Krugman in The New
York Times. Trump “plans to blow up the deficit, bigly, largely to
his own personal benefit.”
Republicans “should ignore the debt consequences and pass the
Trump tax cuts,” said Ed Rogers in WashingtonPost.com. After
“eight years of Obama-era stagnation” we badly need a surge in
growth to restore “our nation’s vitality.” Reform of our sprawling,
antiquated tax code is long overdue, said Douglas Holtz-Eakin
in The Washington Post, and Trump is right to look for ways to
jump-start our “anemic” economic recovery. But a “responsible
tax plan” would accomplish these goals without ballooning our
already unsustainable national debt. If Trump wants to make
America great again, he needs to come up with a tax-reform plan
“built on realistic growth assumptions, not economic fairy tales.”