Trump's tax plan gets fuzzier and fuzzier(Read article summary)
Back in the day, when Soviet-era Russian apparatchiks fell out of favor, they’d become non-persons and even be removed from old group photos. That’s what’s happened to Donald Trump’s tax plan from last September.
As presidential campaigns grind on, we often learn more details about each candidate’s policy agenda. But when it comes to Donald Trump’s tax plan, we know far less today than we did 10 months ago.
Last September, Trump unveiled a relatively specific tax plan. Today, that’s effectively been replaced byeight bullet points, only four of which are even remotely informative. Back in the day, when Soviet-era Russian apparatchiks fell out of favor, they’d become non-persons and even be removed from old group photos. That’s what’s happened to Trump’s tax plan from last September. It has been deleted from his website, photoshopped into oblivion. It is as if it never existed.
Even more perplexing is his relationship with the tax blueprint developed in June by House Speaker Paul Ryan (R-WI) and his caucus.
Last week Trump campaign officials put out the word that he was willing to build a new tax plan around that House GOP proposal. But yesterday, the campaign operatives who engineered that rapprochement were effectively purged. And the campaign’s new CEO, Breitbart Media Chairman Stephen K. Bannon, is a sharp critic of Ryan, whom he described in a Washington Post interview as having been “grown in a petri dish at the Heritage Foundation.”
One can only wonder if the new Trump will be as enthusiastic about working with Ryan as last week’s version. And if not, as seems likely, just what is the current Trump tax plan?
We knew pretty well what the old one looked like. Like most candidate plans, Trump’s September 2015 blueprint left out lots of details. Still, it provided enough information for the Tax Policy Center and others tomodel the plan and for voters to get a pretty good sense of Trump’s tax agenda.
It told us he’d set four individual tax rates (0-10-20-25 percent) and defined the brackets. It proposed a generous new standard deduction, said he’d repeal the Alternative Minimum Tax and the estate tax, and that he’d tax investment income at 20 percent. Finally he said he’d cap the value of individual deductions, though he did not say how.
Trump also told us businesses would pay a 15 percent rate. He promised to end deferral of U.S. tax on business income earned abroad but retain the foreign tax credit and impose a one-time 10 percent tax on current unrepatriated corporate earnings. Less specifically, he promised to “reduce or eliminate some corporate loopholes” and cap the deductibility of business interest expense.
What do we have now? To use a technical tax term: bupkes.
This is about all I could find about taxes on Trump’s campaign website.
- Simplify taxes for everyone and streamline deductions. Biggest tax reform since Reagan.
- Lower taxes for everyone, making raising a family more affordable for working families.
- Reduce dramatically the income tax.
- We will simplify the income tax from 7 brackets to 3 brackets.
- Exclude childcare expenses from taxation.
- Limit taxation of business income to 15% for every business.
- Make our corporate tax globally competitive and the United States the most attractive place to invest in the world.
- End the death tax.
This page describes only one of these proposals, the new childcare subsidy. It says this:
“The child care exclusion will be an above-the-line deduction. Capped at the amount of average care costs in state of residence for age of child. Low-income taxpayers able to take deduction against payroll tax. The plan is structured to benefit working and middle class families, and more detail will be rolled out soon after the plans other elements.”
Trump’s speech last week at the Detroit Economic Club defined his three individual tax rates at 12-25-33 percent. He also supported the House GOP plan to allow firms to immediately expense the cost of capital investments. While his original plan would have capped the deduction for interest expense, he has been silent on whether he’d now end that deduction—a necessary step to limiting tax sheltering when firms are allowed full expensing of their investments.
Where does this leave voters? We could assume that, except for individual rate changes, the childcare subsidy, and expensing, the rest of Trump’s plan remains intact. But we don’t know, and we shouldn’t have to guess.
Last week, the Trump campaign promised it would provide more details about its tax plan, but did not say when. TPC has asked the campaign to clarify his plan, as it does with all candidate proposals. I’ll let you know if we learn more.
For months, two well-known conservatives, Steve Moore and Lawrence Kudlow, have been working on what they describe as a revised Trump tax plan. Trump recently named Moore a formal economic adviser to the campaign.
Yet, all those promises of a new plan all remain unfulfilled. And voters are left knowing almost nothing about what a President Trump would really do about taxes.
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