April 27, 2017

Trump proposes bill to drastically cut his own taxes


Guardian - As well as slashing costs for his own businesses, the new proposals will also cut the alternative minimum tax, a tax designed to stop the super-wealthy from taking so many tax deductions that they avoid paying anything. Leaked documents have shown that in 2005 Trump paid $31m in tax thanks to the AMT.

Mother Jones - We don't know much about Trump's taxes, but his 2005 returns, which were obtained by MSNBC, indicate the he earned $153 million that year. Without the AMT, Trump apparently would have paid just $7 million in taxes, according to the New York Times—a tax rate less than 5 percent. But the AMT forced him to pony up an additional $31 million that year, raising his tax rate to about 25 percent. Asked at a Wednesday press briefing how eliminating the AMT would impact Trump's tax liability, Secretary of the Treasury Steven Mnuchin dodged the question and abruptly ended the briefing.
Nicholas Kristof, NY Times - Trump’s new tax “plan” (more like an extremely vague plan for a plan) is an irresponsible, shameless, budget-busting gift to zillionaires like himself.

This isn’t about “jobs,” as the White House claims. If it were, it might cut employment taxes, which genuinely do discourage hiring. Rather, it’s about huge payouts to the wealthiest Americans — and deficits be damned.

The heart of Trump’s “plan” is to lower taxes for corporations and the affluent. It would eliminate the alternative minimum tax, without which Trump would have paid less than 4 percent in taxes for 2005; with it, he paid 25 percent.

Conservatives emphasize that the official top corporate tax rate in the U.S. is too high, and they have a point. The top rate for American corporations — almost 39 percent, including a 35 percent federal rate and a bit more for the average state rate — is among the highest in the world, according to the Tax Foundation.

Yet that’s deeply misleading, because most companies don’t pay that rate. The Government Accountability Office found that two-thirds of active corporations paid no federal tax. Even large, profitable corporations paid an average federal rate of only 14 percent — and Boeing, Verizon, General Electric and Priceline paid no federal income tax over a five-year period, according to Citizens for Tax Justice.

There’ve been many studies showing that the U.S. effective marginal rate for corporations is in the same ballpark as in other industrialized countries (some say it’s a bit lower, others a bit higher).

… Then there’s the elimination of the estate tax. The White House talks solemnly about protecting family farms and other businesses, but give us a break! The estate tax now affects only couples worth more than $11 million. About one-fifth of 1 percent of Americans are affected — but the estate tax does limit the rise of inequality and assures a hint of fairness, since much of the wealth in rich estates has never been taxed at all.

Treasury Secretary Steven Mnuchin says Trump’s tax “plan” would be paid for partly “with growth” — which means that he has no idea how to pay for it. The Tax Policy Center examined Trump’s campaign tax plan and found it would cause the federal debt to rise by at least $7 trillion in the first decade, and more than $20 trillion by 2036 — slowing growth, not raising it. To put the latter number in perspective, that’s additional borrowing of about $160,000 per American household.

1 comment:

greg gerritt said...

Mnuchin is an idiot and paid liar since there is no growth, and it aint ever coming back.