Posted on 08/30/2015 6:54:01 AM PDT by conservativejoy
First Donald Trump antagonized the Republican establishment with his proposals on immigration. Then he irritated some with his stands on trade and Social Security. Now Trump is preparing a tax proposal that will again set him far apart from the party's powers-that-be.
The problem for the establishment is that Trump's positions on all three issues are more in line with the majority of American voters than the establishment's preferred policies. By using his popularity to force outside-the-GOP-box ideas into the Republican presidential debate, Trump is displaying an uncanny sense of the divisions between voters and the GOP power structure.
Trump has been sending signals that his tax proposal, which he says will be "comprehensive," will include higher rates for some of the richest Americans, a position generally at odds with Republican orthodoxy. "I want to see lower taxes," Trump said at an appearance in Norwood, Mass., on Friday night. "But on some people, they're not doing their fair share."
In particular, Trump has said he will go after "carried interest," which refers to the practice of hedge fund managers who make hundreds of millions of dollars a year paying a lower tax rate than Americans who earn ordinary wages. "I would take carried interest out, and I would let people making hundreds of millions of dollars a year pay some tax, because right now they are paying very little tax and I think it's outrageous," Trump told Bloomberg Politics last week. "I want to lower taxes for the middle class."
"Hedge fund guys have to pay up," Trump said Friday on MSNBC. "I'm going to lower taxes, but these hedge fund guys are making a lot of money — I have friends who laugh about how little they pay — and it's not fair to the middle class."
Trump appears to have a special concern about hedge fund executives — "They don't really build anything, they shuffle paper," he said on MSNBC. But his comments to Bloomberg suggest he might also target "people making hundreds of millions of dollars a year" in a more general way. Asked about a broad policy of increasing taxes on the super rich, Trump campaign manager Corey Lewandowski would say little about Trump's intentions, but noted that "Mr. Trump has said that he does not mind paying what is required to make our country great again."
Raising taxes on anyone, even the super rich, has generally been anathema to Republicans for a generation. But Trump will probably find a receptive ear among American voters overall. An academic study by Stanford professor David Broockman and Berkeley Ph.D candidate Douglas Ahler — a study that also had revealing findings about immigration — suggests that Trump's views on taxes are closer to the public's than those of Republican elites.
In the paper, Broockman and Ahler examined a broad range of public opinion on several issues. They conducted a poll in which respondents, rather than being given either-or policy options, were presented with a range of seven different possibilities on a particular issue, from the far left to the far right. On the question of federal taxes, these are the options Broockman and Ahler presented to respondents:
1. Establish a maximum annual income, with all income over $1,000,000 per year taxed at a rate of 100 percent. Decrease federal taxes on the poor and provide more services benefiting the middle class and poor.
2. Increase federal income taxes on those making over $250,000 per year to pre-1990s levels (over 5 percent above current rates). Use the savings to significantly lower taxes and provide more services to those making less and to invest in infrastructure projects.
3. Increase federal income taxes on those making over $250,000 per year to 1990s rates (5 percent above current rates). Use the savings to lower taxes and provide more services to those making less while also paying down the national debt.
4. Maintain current levels of federal spending and federal income taxes on the rich, middle class, and poor.
5. Decrease all individuals' income tax rates, especially high earners who pay the most in taxes now, accomplished by decreasing government services.
6. Move to a completely flat income tax system where all individuals pay the same percentage of their income in taxes, accomplished by decreasing government services.
7. Move to a flat consumption tax where all individuals pay the same percentage of their purchases in taxes, banning the income tax, even if this means the poor pay more in taxes than the rich. Significantly decrease government services in the process.
I think there would have to be a transition over over 5 years or so.
The talk of soaking the rich to make America great again should raise huge red flags. There’s NO way to rationalize something SO wrong headed. Government should not punish success and government sure as heck doesn’t need one more dime from taxpayers.
The graduated income tax, in any form, violates the principle of equal protection under the law.
It’s unjust, and it’s un-American.
It would appear Trump is being attacked by the FR idle rich for knowing what the Hell he’s talking about! Although my tax plan would be a bit different. Tax the poor. There are more of them.
This is sheer genius. Trump is cutting the legs out from Sanders and Warren.
That’s not bad. We currently. Seem to be paying almost a THiRD of our income in taxes. It’s criminal. I’m tired of them just dipping into our paychecks and taking out what they want.
Fifteen percent would be like christmas!
I would be for the Fair tax if it ditched the subsidy to “low income” people at the outset. The fairest system is one in which EVERYONE pays some taxes, regardless of income. I prefer a no-deductions flat tax as the best.
>>>From what I understand Trump wants #5. Brackets of 1-5-10-15.<<<
This is what he said in an interview recently.
Trump is not taking the same liberal line, if you actually listen...Bernie Sanders has said he wants to tax the rich at 90%. Current rates are higher across the board than what Trump is proposing, but many of the more wealthy individuals use loopholes, write offs and tax shelters to avoid most of what they should actually be paying.
I’m not a huge fan of his graduated plan, 10 or 15% for everyone seems fair, with an exception for those making minimum wage or under a certain per year level, who would get a tax break of some sort. After all, the current minimum wage is not exactly a good living. Yes I know, most are not trying to support a family on minimum wage, but for the very lowest level of the pay scale it might be good to give them a bit of a break.
Trump has also said he wants to close the loopholes allowing wealthy individuals to avoid paying taxes, which is one of the biggest problems, simplify the tax code in general and get the rich to actually pay their fair share rather than using every loophole and tax shelter in sight to avoid paying anything at all.
Unless I’ve been hearing the wrong stuff for a long time, what he’s doing would actually lower tax rates across the board, eliminate loopholes for people like hedge fund managers, and simplify the tax code.
I haven’t heard what he plans for corporate gains tax, from what I’ve heard so far it’s around 40 to 45%, which is one of the reasons corporations are leaving the country.
I’m also wondering about another thing, a report I heard over a year ago was that one company, Google I think, funneled 85% of their total profits to a shell corporation in Bolivia, (I think that was it) where they pay no corporate taxes, and ended up paying a 3.5% overall tax rate. I’m wondering if he’s planning anything to minimize that kind of thing. After write offs and loopholes paying 3.5% is how many corporations are screwing the country. They want to do business here and make as much money as possible, and leave the tax burden to the working folk...
In general it sounds pretty good, I don’t think Trump is taking a liberal stance on taxes, he’s not saying tax the rich at 90% like Sanders, and when he says “the rich”, he means exactly that, not $250,000 and up which is the general level most liberals, especially Obama, consider “rich”...that includes most of the small business owners in the country, and the last thing we need to do is to tax them out of existence. We don’t have jobs already...
I was reading Exodus this morning and God said not to charge interest to the poor. It’s the opposite today. Maranatha!
a consumption tax would stop the economy dead in its tracks, as people simply would hang on to their money in order to avoid taxes. All those little incidental purchases we don't even think about would utterly stop when a comparatively large consumption tax is added.
don't believe me? Look at how shipping vs Free shipping affects the online business. Free shipping, people jump at the chance to buy, add shipping back in and suddenly they start thinking about whether they really need that item. A consumption tax would have the same effect only to a much greater degree
Outside of our tax system being ridiculously complex and persecutory the biggest defect is it has no visibility into the actual work done. A person that earns their money working three jobs and long hours is treated the same as a person who works a mundane shift. I don’t believe in maximum income nor do I believe in a minimum wage however I do not mind if “money skimmers” like hedge fund managers get hit harder but we need to be careful not to miss the point in efforts to exact revenge and satisfy envy. A man being rich does not necessarily make another poor.
Sounds like Trump is correct once again
DEFINITION OF 'CARRIED INTEREST' A share of any profits that the general partners of private equity and hedge funds receive as compensation, despite not contributing any initial funds. This method of compensation seeks to motivate the general partner (fund manager) to work toward improving the fund's performance.
That's just a performance bonus and should be treated like ordinary salary compensation. If a salaried or by the hour employee, or someone who earns sales commissions, gets a Christmas bonus or performance bonus, you can be confident that's taxed as ordinary income. Why should a hedge fund manager's performance bonus be given favored capital gains treatment?
It shouldn't.
If a consumption tax is applied fairly, in other words on everything equally, people aren’t going to just stop buying and selling. Ain’t gonna happen.
But there’s no doubt that while our current system rewards consumption, and penalizes productivity, savings, and capital formation, a consumption tax would have the opposite effect. Productivity, savings, and capital formation would be encouraged, while consumption would be burdened.
Which would encourage THRIFT.
In the real world outside the ivory towers of academia and government, thrift is a good thing, not a bad thing.
“This is sheer genius. Trump is cutting the legs out from Sanders and Warren.”
Agree, it is BRILLIANT. I’m sure you understand the slippery slope of higher taxes as well as I do, but when you’re talking about people making $100M a year, it’s hard for most Republicans to support them paying lower taxes than themselves, just because that’s the way today’s tax code works.
The people making $100M need to SPEAK UP and explain why their taxes cannot be touched. Maybe they have a case, but instead they simply BRIBE politicians from both parties to quietly leave them alone. If they will not (or more likely can not) defend their tax rates, then they need they need adjustment.
Byron York who initially could not trash talk Donald enough seems to be moving from Depression to Aceeptance. LOL!
Quit making sense. That’s not allowed during an election cycle.
Besides being innately fair, the idea of closing those kind of loopholes is more than an economic issue, it’s a political one.
Besides being an “in” for voters who have been programmed to run with the class warfare crap, it’s also a way to separate the GOPe candidates from their life support, Super Pac money.
Since the Citizens United decision, Super Pacs can take big donations, as long as they don’t directly coordinate with a candidate (and if you believe they don’t, you’re probably still struggling with the Tooth Fairy and Easter Bunny concepts).
Who gives to this GOPe slush fund? The same guys who get tax breaks and loopholes and have a lot of dough. Trump is setting the stage to make them an issue, the bad guys who control the GOPe, and by focusing attention on that he makes it harder for Jeb to get funding.
Will it work? Well, the Jebster just let three top “campaign” money people go, but they kept their jobs at the Super Pac that funnels money to Jeb. Why would he do that? Could be Jeb’s people are getting nervous that the connection to Jeb and the Super Pac is too close to stand any kind of scrutiny, and Trump is bringing that scrutiny to bear.
So, either they are exposed as campaign finance crooks or the coordination between candidate and Super Pac money is crippled, or both, and all because Trump is willing to ignore the “No class warfare” plank of conservatism. As a bonus, this all cost him next to nothing.
You can’t change the tax system without getting elected, and getting elected with a mandate to cut the purse strings that keep creatures like McConnell, Boehner and McCain in office is certainly a bonus.
He’ll lose a percentage of rock ribbed conservatives by doing this, but he’ll more than make up for it by picking up some squishy moderates and libtards who want to “stick it to the rich”, as well as reinforcing his support from those who see GOPe and the ‘Rats as two sides of the same corrupt coin.
If Trump can withstand the advertising blitz that the GOPe is going to unleash on him, it might well work in a big way.
I wonder if Trump plays chess? He probably doesn’t have the time for it, but I think he’d be pretty good at it.
bottom line, taxes "discourage" whatever activity is being taxed. Add a huge consumption tax and you will slow consumption to a near stand still. Many many many disposable income associated businesses would fold and with them goes employment.
Just an example. Knives and watches are a very popular item with men, with many men having dozens. Lets say a current Spyderco knife is $70, add in a a consumption tax and suddenly that $70 knife is closer to $100. What do you think that will do to Spydercos many repeat customers? The answer is they will buy far far fewer knives and the company would almost certainly go under.
Our economy could not withstand a consumption tax.
Look.. of anybody running in the race I think Trump is probably going to have the most intimate knowledge of how taxes and finances work especially with the rich...
Trump is not a rich guy living off a trust fund
Trump been a guy that’s been “creating wealth” all his life he understands the “creation of wealth” and that’s the critical thing
So realistically it’s only to his advantage (and ours) if he got in to put a tax system in place that favours creation of wealth.
Trump is a lot of things but he’s not a “zero-sum” socialist.. unlike the left that think if you’ve got money you must of stole it from someone else....
Trump.if anyone should understand how money and wealth is created ...it is grown... it not zero-sum and the rich are stealing it from the poor.
I’m not 100% on board with Trump .. but I’m willing to listen to him
Convince them to hold out for Benchmade?
;)
Nobody seems to notice that Trump is advocating that everyone with Income will pay Federal Income Taxes. Even the low earners will pay 1%.
While not a lot of money, it means that they will have some skin in the Game and maybe they will start to pay attention to the realities of an out of control Government using their money to study Obese Lesbians.
To me his Tax Plan is a Graduated Flat Tax. I still don’t know if it eliminates SS and Medicare Taxes or the Employer match. Lots of details need to be forthcoming including the fact that it would have to be revenue neutral unless we can get Government Spending under control.
Of course, a radical Tax proposal is one thing. Getting it through Congress is another.
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