Claims about Trump’s tax plan don’t hold up

Ronald Reagan and George W. Bush both cut taxes, and both ended their presidencies with huge budget deficits.

The plan preserves the home mortgage interest deduction, but housing and mortgage industry watchers say the proposal to double the standard deduction would essentially nullify the itemized deduction on mortgage interest as a tool that promotes homeownership. A senior fellow at the nonpartisan Tax Policy Center, Howard Gleckman, says no tax cut has ever been self-financing.

The nominal corporate tax rate would be lowered from 35 percent to 15 percent.

Mr. Trump offers cuts to most Americans. Will he, for instance, propose eliminating tax breaks that benefit real estate investors and developers? This is a problem for Republicans because it means they would need Democratic support in the Senate to pass a tax overhaul that significantly cuts corporate taxes. Their newfound cash was not used to expand new products, build new factories, and create more employment. Families had to pay 3 percent of what they earned from $600 to $10,000. Importantly, state and local taxes would not be deductible for federal income tax purposes; this is consistent with the House Republicans’ proposal in the Blueprint. “I know that many American companies. value the quality of the people here”.

And then there’s his idea of taxing so-called pass-through income at 15 percent.

At the moment, Trump’s ambitions are decidedly more modest, reducing today’s seven brackets, ranging from 10 percent to 39.6 percent, to three brackets, 10 percent to 35 percent. But the administration has yet to determine the income levels for people who would be put in each bracket.

Trump’s tax plan shows the GOP cares about cuts for the rich, far more than it cares about debt. People like him. Exactly like him. “By cutting the business rate to 15 percent and setting the top rate on wages at 35 percent, Trump would encourage business owners to cut their own wages and pay themselves in profits instead”. Without it, he would have paid just $5.5 million, according to a leaked copy of that year’s return.

Yesterday the Trump Administration announced the outline of its tax reform proposal.

For individuals and families, Trump’s plan more closely resembles a blueprint released by House Republicans a year ago. One out of 700 estates are big enough to qualify. “The federal government is essentially subsidizing high tax rates in states like California and NY”, said Nicole Kaeding, an economist at the Center for State Tax Policy. And in the case of millions of low- and middle-income families, the breaks could raise their tax burden when combined with Trump’s other proposals to eliminate head of household status, repeal personal exemptions and raise the lowest income tax rate to 12% from 10% now.

Of course, there were dissenting voices, like Chris Edwards of the Cato Foundation, who wrote, “What about the effects of tax reform on the deficit?”

A new bill would require the state Department of Taxation and Finance to release five years of state tax returns by major elected officials who file in NY, including the president, governor and state attorney general.