Posted on 09/28/2015 7:43:39 AM PDT by SeekAndFind
Donald Trump is expected to release his tax plan at some point today, but he let 60 Minutes in on a little sneak peak. There’s good news and bad news on the plan. Here’s the good news first.
Donald Trump: I know. I know. I will say this, there will be a large segment of our country that will have a zero rate, a zero rate. And that’s something I haven’t told anybody.
Scott Pelley: You’re talking about–
Donald Trump: We’re talking about people in the low-income brackets that are supposed to be paying taxes, many of them don’t anyway.
Scott Pelley: You’re talking about making part of the population exempt from income tax?
Donald Trump: That is correct.
Scott Pelley: You’re talking about cutting corporate income taxes?
Donald Trump: That is correct.
So, so far so good because it lowers some tax rates to zero and cuts the corporate tax rate. But then Trump goes into complete Bernie Sanders land by saying he wants to raise taxes on the rich (emphasis mine)!
Scott Pelley: Who are you going to raise taxes on?
Donald Trump: If you look at actually raise, some very wealthy are going to be raised. Some people that are getting unfair deductions are going to be raised. But overall it’s going to be a tremendous incentive to grow the economy and we’re going to take in the same or more money. And I think we’re going to have something that’s going to be spectacular.
Scott Pelley: But Republicans don’t raise taxes.
Donald Trump: Well, we’re not raising taxes.
It’s so amusing how he says, “we’re not raising taxes” after saying he was going to raise taxes on some of the very wealthy. But it’ll be interesting to see just how high the tax rates for the wealthy will be and how Trump plans to off-set the lost revenue on the middle class. It’s not a bad thing to lower taxes on any class, however any tax cuts have to be off-set by spending cuts. It’s the nature of the beast, which both Republican and Democrats fail to realize over and over and over again. By focusing on hitting upper income wage earners, it could end up hurting more than it helps. Folks like Bernie Sanders like to cite the fact there was a 91% tax rate on the rich in 1954. But Amity Shlaes wrote in Bloomberg in 2013 how that wasn’t quite true.
Official rates matter, but so do effective rates, the percent of income that people actually pay in tax. The Internal Revenue Service reckoned that the effective rate of tax in 1954 for top earners was actually 70 percent.
Or lower. Marc Linder, a law professor at the University of Iowa, has shown that a more comprehensive interpretation of income that includes capital gains suggests the real effective tax rate for millionaires was 49 percent in 1953. The effective rate dropped throughout the decade, reaching 31 percent by 1960. That 31 percent is just slightly higher than the 29 percent level a Congressional Budget Office report figures the average effective tax for the top quintile will be in 2014. And that number for 2014 doesn’t include taxes in Obama’s health-care law.
A second fantasy about the 1950s is that government soaked the rich. Joseph Thorndike and Martin Sullivan in Tax Notes magazine took a look at the tax distribution of the decade. They found that those earning more than $100,000 paid less than 5 percent of the taxes collected in the U.S., a far smaller share than the wealthiest shoulder today.
Here’s the other concern regarding Trump’s tax plan: the rich are already being soaked pretty hard as it is. Take a look at the 2015 tax rates set by the IRS.
To put it in real numbers, single people who make a million dollars in a year, actually make $662K, while married couples filing jointly who make a million a year, actually make $673K. Married couples filing separately make $652K. That’s only calculating federal tax and has nothing to do with the states which have income tax as well. The only other candidate, at this moment, who is proposing a tax hike is Bernie Sanders. Here’s his plan.
Trump’s plan may be less than Sanders, but that still doesn’t mean it’s a good idea. He still has to explain how much his plan to take care of the “lower 25%” on health care will cost (emphasis mine).
Donald Trump: There’s many different ways, by the way. Everybody’s got to be covered. This is an un-Republican thing for me to say because a lot of times they say, “No, no, the lower 25 percent that can’t afford private. But–”
Scott Pelley: Universal health care.
Donald Trump: I am going to take care of everybody. I don’t care if it costs me votes or not. Everybody’s going to be taken care of much better than they’re taken care of now.
Scott Pelley: The uninsured person is going to be taken care of. How? How?
Donald Trump: They’re going to be taken care of. I would make a deal with existing hospitals to take care of people. And, you know what, if this is probably–
Scott Pelley: Make a deal? Who pays for it?
Donald Trump: –the government’s gonna pay for it. But we’re going to save so much money on the other side. But for the most it’s going to be a private plan and people are going to be able to go out and negotiate great plans with lots of different competition with lots of competitors with great companies and they can have their doctors, they can have plans, they can have everything.
For those keeping score at home, that’s single-payer health care, the thing Nancy Pelosi pushed last year. I’m a little curious how “the base” would react if say Ted Cruz or Ben Carson proposed the tax hike and single-payer. If it were Jeb Bush, “the base” would probably be running for the pitchforks and torches quicker than you can say “No more Bushes!” It just doesn’t seem logical for them to say, “Damn the GOP Establishment for wanting this!” but thinking it’s just fine and dandy for Trump to want it. The flat tax plans proposed by Ben Carson (10%), or Rand Paul (14.5%) are more palatable, even if I personally think they’re still too high. The Fair Tax idea of a 23% sales tax is still too high for my own personal preference, but I’m not against discussing a lower rate if it means no more income tax. There are just too many questions on how Trump’s “preview” of his tax proposal will actually help the U.S. more than it will hurt. He could surprise me in a good way, but I’m not betting on it.
Wealthy to Trump is a lot different than what the democrats call wealthy. Democrats think middle class income is wealthy.
They can’t help themselves I guess.
Anyhow if this is any thing like the proposals that have come from Trump in the past, his idea of soaking the rich will look like a 50% tax rate cut compared to what they are paying today. Not as “fair” as flat tax but still overall more merciful to the economy. He’s apparently counting on aggressive Laffer Curve effects to allow the economy to boom and make up (or even more than make up) what would be foregone by lower tax rates.
I would never say never when it comes to Donald and capitalistic ideas.
And if he can't?
If he raises Tariffs in response to trade deficits, the treasury will see a huge increase from the tariffs.
Which will be a large tax increase on U.S. consumers.
RE: Looks like Hotair has its Anti Trump soldiers on this site.
If you bothered to read the Hotair post, they are simply QUOTING what Trump said in the 60 minutes interview. A huge portion of the article copied from the TRANSCRIPTS of the interview itself.
If that looks like Anti-Trump, then maybe we ought to ask ourselves what Trump really stands for when it comes to taxes.
Markets adapt if given half a chance.
The golden goose has been dying the death of a thousand cuts, to shamelessly mix metaphors.
Thanks, Danny, for simplifying that for others to understand ;-)
And Trump would have that red side have at least a symbolic amount of skin in the game.
Based on the above chart, I would guess that Trump is arguing that Hedge Fund managers (because of the clever way they manipulate their finances) belong on the red side of the pie?
Correct me if I am wrong.
He can. He will need the US trade commision and/or Congress's cooperation, but he will be able to get that.
Which will be a large tax increase on U.S. consumers.
Our founding fathers viewed tariffs as a tax on foreigners wanting to sell into our market.
The current price of the cheap imports don't include the taxes that domestic producers pay, the cost of supporting unemployed Americans or the opportunity cost of having those Americans employed and paying taxes and spending their earnings into our economy.
Wealthy to Trump is a lot different than what the democrats call wealthy. Democrats think middle class income is wealthy.
So true.
The Donald is gradually exposing himself for the noncon he truly is. This is a good thing.
He'll need private industry to create the jobs, won't he?
Our founding fathers viewed tariffs as a tax on foreigners wanting to sell into our market.
It may be a tax on the foreigner but it will be passed on to the domestic consumer.
The current price of the cheap imports don't include the taxes that domestic producers pay, the cost of supporting unemployed Americans or the opportunity cost of having those Americans employed and paying taxes and spending their earnings into our economy.
So your solution is to slap on a tariff to make up for that and increase the price everyone pays for imported goods. As a consumer I'm not sure I'm thrilled with that.
Conservatives should consider someone other than a blowhard, limousine liberal.
I’ve been gone a while. When I logged back in and read the Trump hysteria, I thought I’d logged into the wrong site. This isn’t the FR of old, where supporting someone like…say Giuliani…would get you zotted.
SOME QUESTIONS FOR TRUMP:
* How will increase tariffs on foreign made goods affect consumer prices in the United States?
* A huge attraction of companies moving manufacturing overseas are the following: NO UNIONS, FEW REGULATIONS, LOW TAXES, ALMOST NO MINIMUM WAGE, NO HEALTHCARE REGULATIONS, REASONABLE POLLUTION STANDARDS, etc.
What makes Trump think that by simply increasing tariffs, companies are then going to rush back and ignore those factors?
Incentives.
“and we took in a lot of money under that”
So that’s what you want. Lots of money to D.C.? Whatever happened to cutting back the government?
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.