GOP presidential nominee Donald Trump released his tax plan on Monday, and as promised, the plan would deliver benefits for the middle class and working moms. Trump said on Tuesday during a phone-in on Fox and Friends he will also soon release a plan to address student loan debt.
Trump’s plan keeps income tax deductions for mortgage interest and charity donations, and it reduces the number of tax brackets. A benefit for working moms will be in the form of a tax credit or deduction for child care expenses which have hit middle class working families very hard. Trump’s plan will also eliminate the marriage penalty, one of the most egregious penalties in income tax history.
MarketWatch noted changes in the corporate rate as well as changes in the rate for proprietorships (self-employed individuals often file this way):
“Trump would cut the corporate tax rate from the current 35% to 15%, but eliminate tax deferral on overseas profits.
The 15% rate would also apply to business income from sole proprietorships and income passed through to individuals from businesses conducted as S corporations, LLCs, and partnerships.
Trump would impose a cap on business interest deductions.”
The individual income tax plan is still based on higher rates as income rises.
Trump’s plan would also eliminate the massive taxes contained in the Patient Protection and Affordable Care tax bill. Some of those tax hikes kick in only after President Barack Obama leaves office. The taxes impact individuals, workers, and employers as well as medical device manufacturers who will push the cost of tax hikes to the consumer.
The plan would have an impact aligned with the original intent of the income tax as we think of it today:
“Yet in 1913, due to generous exemptions and deductions, less than 1 percent of the population paid income taxes at the rate of only 1 percent of net income.”
Trump announced the plan as a general framework in a speech in Detroit. He says he intends to “jump start America,” and few would deny that is sorely needed.
The Clinton campaign was fast on the draw to attack the plan, with Dems’ nominee Hillary Clinton snarking about Trump’s economics adviser Stephen Moore who has a long credible record in his field.
Mrs. Clinton’s adviser has worked for President Barack Obama’s administrations. We currently have the largest transfer of wealth from the people to the federal bureaucracy in history.
Mrs. Clinton also wants to expand a program that is one of the worst when it comes to accountability and fraud, the Earned Income Tax Credit. The IRS cites a 21-26 percent ‘erroneous payment’ rate for EITC on a page carrying the headline ‘Fraud.’ Democrats have repeatedly barred reform of this program. The Clinton campaign’s economics guru is very young, and little is available about his biography other than academics.
Trump has pointed out the folly of Clintonomics which ultimately resulted in the mortgage lending meltdown and a taxpayer bailout for toxic derivatives. Trump isn’t the only one to note Bill Clinton’s role in the meltdown. New York Times financial writer Gretchen Morgenson detailed it in her best-selling book Reckless Endangerment.
Trump is the only outsider in the presidential race. Both Hillary and Bill Clinton have impacted government policy not only during the 1990s when Mr. Clinton held the White House but also during both terms of President Barack Obama whose cabinet and insider circle were completely dominated by Clinton insiders.
Trump has a populist bent, and I’d say it’s about time Republicans ran a candidate who does. The only way to effect change in the federal government is to send someone who won’t continue the status quo as Mrs. Clinton would.
Opposition to Trump among status quo insiders on both sides of the aisle has nothing to do with his abilities. It has to do with changing the paradigm from the current predatory approach Washington has towards the wealth of average Americans, one reason the middle class has fared poorly with Obama while the wealthiest have benefited disproportionately.
Robert Donachie at The Daily Caller has compared Trump’s plan with that of Mrs. Clinton whose plan thus far looks mainly like a basic tax hike on higher incomes.
In the Fox & Friends call-in on Tuesday, Trump did something rare. He answered questions viewers had emailed to the show.
(Commentary by Kay B. Day/August 9, 2016)
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