Tags: Donald Trump | donald trump | proposal | tax plan | taxes

WSJ: Trump Tax Plan Revisions Cost Less, Still Benefit Wealthy

Image: WSJ: Trump Tax Plan Revisions Cost Less, Still Benefit Wealthy

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By    |   Friday, 16 Sep 2016 01:17 PM

Donald Trump released a revised tax plan on Sept. 15, and The Wall Street Journal said it's a more modest plan than Trump's proposal from 2015.

CNN Money reported that Trump said that his revisions benefit the working class and middle-class taxpayers.

"They will receive the biggest benefits—it won't even be close," the Republican presidential candidate said.

In its analysis, The Journal pointed to some key revisions.

The plan will cost $4.4 trillion over a decade, compared to the original plan's cost of $12 trillion. Accounting for economic growth, the plan would cost $2.6 trillion, but the Journal said economists are dubious that it could cover its own costs.

Only manufacturers can write off expenses and they cannot also claim interest deductions. Trump had said in August that he would allow capital expense write-offs immediately, and his advisors said he supported interest deductions.

Trump would reduce the federal tax rate on the highest incomes from 39.6 percent to 33 percent, and reduce the tax rate on corporations from 35 percent to 15 percent. A 33 percent top rate on businesses would make Trump's plan to tax carried interest of equity managers more impactful than it was in the previous year's plan.

His limits on deductions — $100,000 for individuals and $200,000 for married couples —would limit the wealthiest households' ability to write off state taxes, mortgage interest, and charity, the Journal's analysis said.

"They're whacking the highest interest taxpayers the most, which from a populist perspective makes a lot of sense," Lanhee Chen, Mitt Romney's policy director from his 2012 campaign, said.

S Corporation president Brian Reardon said that Trump's corporate tax rate reduction would lead more people to put their money in corporations. If Trump sets a lower corporate tax rate, "They just traded one loophole for another here. It just takes us back to the 1980s when everyone sheltered their income," Reardon said.

The Journal's analysis said that Trump's plan would still increase the federal debt, and would require domestic spending cuts to hit his targets.

Trump's plan still includes a repeal of the estate tax, which only benefits 0.2 percent of estates, including Trump's own — at current rates, if Trump is worth $10 billion, then his family would owe $4 billion in estate tax.

"Trump is cutting the cost of his original tax plan by reducing his middle-class tax cuts, but he has retained many of the biggest tax cuts for the rich," Center for American Progress Action Fund analysts wrote.

Eliminating the estate tax would give the wealthiest Americans a $269 billion tax break, according to The Huffington Post

The Journal's analysis also pointed out that head of household status would be removed, which would cost single parents a standard deduction, and the gap in corporate tax rate could impact small businesses, and larger ones in which owners pay their taxes on their individual returns.

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Donald Trump released a revised tax plan on Sept. 15, and The Wall Street Journal said it's a more modest plan than Trump's proposal from 2015.
donald trump, proposal, tax plan, taxes
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2016-17-16
Friday, 16 Sep 2016 01:17 PM
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