Thursday, May 5, 2016

WTF? This is Donald Trump's New Position On Taxes

From the transcript of his interview with CNBC:

It is difficult to know exactly what he means. Although, I would advise being prepared for a tax hike during a Trump presidency. Reagan's tax cuts were phony, Trump's sleight of hand will be worse.



  1. A little off topic, but I just saw a piece on ZH regarding Trump's possible Veep picks. I was faced with the true horror of the candidates. He says he wants a government type to negotiate Congress. So no retired admirals, I guess. Anyhow, almost by definition it'll be some sort of scumbag. The highlighted possibles: Newt Gingrich (yikes!), Li'l Marco, Fat boy, etc etc. Yuch!! I'm assuming Cruz is out, having just called Trump a psychopath (finally, truthiness from Ted).
    Question: Is it safer to live on a Caribbean island, or someplace like Montana?

  2. The irony of Reagan's tax cuts is that he was probably the only President since FDR that has actually raised taxes on the extremely wealthy, from an effective tax rate perspective (what matters). This is lost on most people (including those that should know better), since they seem to judge the level of taxation by the marginal rate tables and not the code behind those tables. Robert Reich is a guy that even has books published that are dead wrong in this perspective. The extremely wealthy would love the old 1953 code to come back. Most of our extremely wealthy clients pre-ERA81 and TRA86, had effective rates below 11%. Today that number is probably closer to 16%. What is also lost is how TRA 86 basically collapsed commercial R/E and O&G industries (and the S&L's) as a result of their over dependence on tax shelter driven financing.

    However, to say that Reagan's tax cuts were a sham, depends on the perspective you are judging them. From an overall perspective, it was a shuffling of chairs (it was sold as revenue neutral), but from the perspective of most people, and in particular the employed professional class, (ie, CEO's, DR's, lawyers, engineers, accountants etc) it was a very healthy cut in taxes. There use to be a time when the old adage "you'll never get rich working for someone" was true. It was true, not because businesses were too cheap to pay you what you deserve, but because the tax code prevented/discouraged it. There were very few ways for those employed, without massive amounts of capital, to shelter ordinary income.

    I know first hand, because I was a Big 8 tax accountant at the time and lived it. BTW, Reagan's biggest impact in regard to taxation was not his rate cuts, but were the reporting requirements and the concept of automated matching audits (1099s to returns) that came out of ERA81 and TRA86. He upped the penalties substantially for not filing information returns and basically gave the IRS teeth to go after those that did not comply.

  3. It is very possible that the policies put in place by a Trump Presidency look no different than those put in place by a Hillary Presidency.

  4. "It's going up....but its a cut for everybody"

    What does that even mean?

  5. I'm not supporting his tax plan, however it is very easy to interpret what he said.

    He put out a proposed tax plan months ago with tax cuts across the board. His quote here is talking about that proposed plan being negotiable. He says he could see the rate on the highest bracket going up from his initial proposal but still being a cut from what the rate is currently.

    This is really freaking simple people.

  6. Months ago he put out a proposed tax plan. In the interview with CNBC he said that the rate he proposed on the highest bracket may go up from his initial proposal, but still remain a cut relative to current rates.

    How exactly is that difficult to understand?