Summary of Donald Trump’s Tax Proposal
Donald Trump proposes to cut taxes for businesses, individuals and heirs quite dramatically. He would decrease federal tax revenues by $9.5 trillion over the next 10 years. Over the following 10 years federal revenues would be cut by $15 trillion. He would increase the federal debt by $11 trillion over the next decade and by $34 billion over the following 10 years.
The details for individuals are as follows: 1) he proposes three tax brackets 10, 20 and 25% to replace the seven tax brackets (ranging from 10 to 39%) we currently have, 2) he proposes increasing the standard deduction to $25,000 for single filers and $50,000 for families, 3) repeal the alternative minimum tax, 4) repeal the 3.8% net investment surtax (finances the Affordable Care Act) and 5) tax business income at preferential rates. Ten year cost is $7.3 trillion.
The details for corporations are as follows: reduce the corporations’ income tax rate from 35% to 15% and repeal the alternative minimum tax. Ten year cost is $1.9 trillion.
The details for heirs are: repeal the estate and gift taxes. Ten year cost is $224 billion.
Assuming no spending cuts, these proposals increase the national debt by 39% over ten years and by 80% over 20 years.
Individuals in the lowest 20% of incomes would have their taxes reduced by 3.2% ($128 a year). Individuals in the top 20% would have their taxes reduced by 18.3% ($25,000). Individuals in the top 1% would have their taxes reduced by 21% ($275,000 annually). Individuals in the top 0.1% would have their taxes reduced by 22% ($1.303,000 a year).
In other words, this is a tax proposal by a billionaire to benefit himself, his family and other fellow billionaires.
To make the Trump tax proposal budget deficit neutral (i.e. no increase in the federal debt), federal spending would need to be cut by 21% -- e.g. Medicare and Social Security would need to be cut by 41% or all federal discretionary spending (this includes the military) would need to be cut by 80%.
Prepared by Lucien Wulsin
Dated: June 24, 2016