Hocus, Pocus here we go.
The Trump campaign is coming out with a new tax plan tomorrow,
Trump economic adviser Stephen Moore says this about the plan in an interview with USA Today:
The heart of the plan is a 15% corporate tax rate. That’s down from the current rate of 35%. . . . And then there will be a middle class tax cut. Every time we’ve met with him, Trump has said, “I want it oriented toward the individual, helping middle class, and financially stressed out families.” we’re running the numbers now, and the average middle class family will save somewhere in the neighborhood of $1,500-$2,000 a year on their federal income taxes. It eliminates the estate tax. It eliminates the marriage penalty. It eliminates the alternative minimum tax. About 90% of Americans would no longer have to itemize deductions because they would be able to take a standard deduction.
But it is really a scam. It's moving the methods of taxation not eliminating taxes.
Moore pretty much admits this:
On the business side, most of the payoff is through closing loopholes...It's trickier on the individual side, because the vast majority of revenues that the government raises is not through the business tax, but through the individual income tax system. So we're talking about some kind of a cap on deductions that people can take, especially wealthy people. This is not well known but there are dozens of loopholes and carve-outs in the tax system.Scott Sumner comments:
Interestingly, Moore did not mention any new income tax rates. My prediction is that the new top income tax rate will be much higher than the 25% top rate proposed by Trump when he was trying to get the GOP nomination....And about the new plan itself, Sumner adds:
Should we believe any of this? You tell me. Even Trump’s aides say the new tax plan is radically different from the old one, with just 1/3rd the revenue loss. So we now know with 100% certainty that nothing Trump said about taxes before the convention can be trusted. What about promises before he takes office? I see no reason to take them any more seriously than the previous promises.-RW