Trump tax plan coverage: Tax Foundation forecasts a $12 trillion revenue shortfall over next ten years; CNN says "big price tag;" LA Times says could cost trillions; Newsmax headlines, "Trump's Tax Plan Borrows From Republicans Who've Gone Before Him;" US News headlines, "Donald Trump's Tax Plan 'Out-Bushes Bush';" BostonGlobe headlines, "... cuts for the rich;" and WaPo states and then rates:
Fact Checker
Trump’s tax plan and his claim that ‘it’s going to cost me a fortune’
“It’s going to cost me a fortune.”
—Businessman Donald J. Trump, speaking about his tax plan, Sept. 28, 2015
[...] Trump pitched the plan as being tough on the wealthy, highlighting a proposal to eliminate a tax preference that has allowed hedge-fund managers to claim relatively low tax rates.
“It reduces or eliminates most of the deductions and loopholes available to special interests and to the very rich,” Trump declared. “In other words, it’s going to cost me a fortune — which is actually true — while preserving charitable giving and mortgage interest deductions, very importantly.”
Given what we know about the plan, is this claim even in the realm of possibility?
[...] Trump has not disclosed his tax returns but his financial disclosures indicate that he earns at least $250 million a year. That’s obviously a substantial sum of money, but there’s no precise breakdown of the percentage from dividends or capital gains, which are taxed at lower rates than ordinary income.
[...] Still, just on the face of it, Trump’s proposal to slash the top tax rate from 39.6 percent to 25 percent would result in a huge tax cut. On [Trump's claimed annual income of] $250 million, that’s a savings of more than $37 million. But it’s not quite so simple.
Annual income of at least $250 million would easily place Trump on the list of the top 400 taxpayers in the United States. For 2012, the last year available, the Internal Revenue Service said adjusted gross income of $139 million was needed to be included. (The average income in this rarefied group was $336 million.) So for the purposes of this fact check, let’s assume Trump’s income and tax profile is reflective of the average of these super-wealthy taxpayers.
A big chunk of the earnings in this group — more than 70 percent — comes from dividends and capital gains. If the income comes from assets held for more than a year, it is taxed at 20 percent if the tax payer is in a 35 percent tax bracket or higher. Trump would keep this 20-percent rate for people in the 25 percent bracket (which would start at $300,000 for married filers), so one could expect little change in his tax liability for dividends and capital gains.
Only about 15 percent of the income among the top 400 is taxed at regular income tax rates, which is a key reason why the average tax rate for the top 400 tax filers was just 16.72 percent in 2012. But if that percentage were applied to Trump’s presumed income of $250 million, for income of $38 million taxed at regular rates, that’s still a savings of at least $5 million in taxes.
Trump is mostly silent on what deductions he would eliminate for the wealthy, but he says he would keep the deduction for charitable gifts. It turns out that among the top 400 taxpayers, charitable deductions amount to an average of 65 percent of all deductions. So even if all other deductions were eliminated, which is unlikely, the changes would not make enough of a dent to make up for the savings from the sharp cut in income tax rates.
Moreover, Trump says he would help business owners by creating a special 15-percent tax rate. (Corporations would also get a 15 percent tax rate, down from a current high of 35 percent.) One could easily see how the wealthy — including hedge fund managers and Trump himself — could quickly take advantage of the new rules to reduce their tax liability.
Finally, Trump says he would eliminate the estate tax, saying “a lot of families go through hell over the death tax.” As we demonstrated, that’s not correct. Congress in recent years has significantly boosted the exemption from taxation, to nearly $11 million for couples, so now only about one out of every 800 deaths triggers an estate tax liability. Indeed, there were fewer than 5,000 estate tax returns filed in 2013, compared to 139,000 in 1977.
But it’s virtually certain that Trump’s heirs would be subject to the estate tax under the current rules. So that tax change would be a substantial windfall for the Trump family.
[...] No matter how we slice it, we do not see how Trump can justify his claim that his tax plan would cost him “a fortune.” On the contrary, it appears it would significantly reduce his taxes — and the taxes of his heirs.
If more information becomes available — such as the release of Trump’s tax returns or more details on his tax plan — we will of course update, and if necessary adjust this ruling. But for now it’s a Four Pinocchio statement.
Per WaPo's ratings, lies max out at Four Pinocchios, meaning:
[...] Three Pinocchios
Significant factual error and/or obvious contradictions. This gets into the realm of “mostly false.” But it could include statements which are technically correct (such as based on official government data) but are so taken out of context as to be very misleading. The line between Two and Three can be bit fuzzy and we do not award half-Pinocchios. So we strive to explain the factors that tipped us toward a Three.
Four Pinocchios
Whoppers.
So -- Only true woodenheadeds among us would identify Four Pinocchios with proximity to truth. Per WaPo.
The Newsmax report, mid-item, notes:
"This is something, and I've been watching it for a long time, everybody agrees to," Trump said about repatriation holiday, adding that he plan would create "an amazing code."
Like his rivals, Trump also leans on projected growth to pay for the tax cuts. Bush's cuts would cost an estimated $3.4 trillion over a decade, with a net revenue loss of $1.2 trillion after projected economic growth. Rubio's plan to slash taxes on investments, wages, and business income would reduce collections by $1.7 trillion during the same time, while, like Bush, largely favoring the top 1 percent of Americans over the middle class.
Trump claimed his plan would be "fully paid for," but didn't provide his projections. During an interview on 60 Minutes on Sunday, Trump said his plan relied on economic growth to avoid adding to the nation's $18 trillion debt. On Monday, Trump said his plan would be paid for if the country makes "much better deals."
"I'm not a populist," Trump told reporters on Monday. "I'm a man of great common sense."
A trickle-down liar actually is not a populist, so that one Trump "not a populist" claim rings true. Trickle down never has worked and it always has been the standard-issued gold-plated lie of the wealthy proposing cutting their own and their cronies' taxes, at the expense of - go figure.
Last of the excerpting, the US News item, source of the image, reports in part:
"It is a fraud – a total fraud," Al Hunt, columnist and commentator at Bloomberg, said in response to the tax proposal on Bloomberg's "With All Due Respect" Monday. "He's going to massively increase defense spending, and then he's going to have a huge revenue-losing tax plan. Guess what? There's a lot of debt there."
I am spoon feeding you bullshit.
The primary criticism: Despite Trump's claims that the plan is "revenue neutral," few see how that could be a realistic possibility given the extent of the tax cuts.
"He said he would eliminate deductions, but there aren't enough deductions around to reduce the rates that low without making a huge increase in the deficit," John Harwood, chief Washington correspondent for CNBC and a writer for The New York Times, said in an interview Monday on CNBC. "No one can look at this tax plan and think that it would be revenue neutral."
[...] "Trump claims the plan will be revenue neutral, but he has made bombastic exaggerations before, and this time is no different. In fact, there is no possibility that this plan would not be a gigantic tax cut for the rich and a gigantic revenue loser for the government," Robert McIntyre, director of Citizens for Tax Justice, said in a statement Monday. "The most widely promoted tax hike in Trump's plan, closing the carried interest loophole, would barely amount to a slap on the wrist for hedge fund millionaires Trump says should pay more."
Trump in the past has vowed to take on the national deficit, which he has said is comparable to "Greece on steroids." [...]
The Donald is not without allies. Grover Norquist, founder of the Americans for Tax Reform nonprofit, called the plan "Republican orthodoxy, with a little twist here and there." Conservative radio host Mark Levin called it a "hell of a plan." Fox television personality Eric Bolling, whose employer has had a less than amicable relationship with Trump in recent weeks, gave the plan "an A-plus."
[...] Trump's plan isn't so different from the one touted by GOP rival Jeb Bush, despite the apparent animosity that exists between the two presidential hopefuls. Both reduce the number of tax brackets in the U.S. Both involve tax breaks for the country's top earners. Both specifically target loopholes that allow the well-connected and savvy to navigate around paying their full share of taxes.
So, Trump and the Bush family's candidate both say, "Trust me."
Bless you if you do.