Trump tax plan: Cut rates, brackets, loopholes
In a press conference Monday at Trump Tower, the real estate billionaire said his tax policy plan would not add to the country’s tax deficit.
Among the more notable changes Trump would institute would be a tax cut for the middle class and below. The plan calls for reducing the number of individual tax rate brackets to four from seven, and zeroing out income taxes on single earners making less than $25,000 as well as married couples earning less than $50,000.
“It will provide major tax relief for middle income and most other Americans,” Trump said. “There will be a major tax reduction. It will simplify the tax code. It will grow the American economy at a level it hasn’t seen for decades, and all of this does not add to our deficit.”
The corporate tax code would be lowered significantly, to 15 percent from 35 percent, with some of the difference made up by cutting tax deferments on overseas earnings.
In addition, Trump says his plan would close tax loopholes for “special interests” and “the very rich.” The plan targets hedge fund managers, who would no longer be able to defer taxes on income through “carried interest” — a practice critics have decried as impeding the Internal Revenue Service from collecting billions in potential income tax revenue.
Trump, who has received criticism for not hanging his candidacy on hard policy, appears set to use the proposed tax reform plan as a major part of his platform.
“This is a plan that is simple, that is a major reduction,” Trump said. “I think people are going to be very happy. We’ve already had some very good reviews. I did the plan with some of the leading scholars and economists and tax experts that there are in this country. They love it. They say: ‘Why hasn’t this been done before?’ And this is in my wheelhouse; this is what I do well.”
Washington's leading taxpayer advocate praised the policy paper.
“Trump’s plan is certainly consistent with the Taxpayer Protection Pledge,” said Grover Norquist, president of Americans for Tax Reform. “Trump has said he opposes net tax hikes and has made clear that the real problem is spending. This plan is a reform, not a tax hike.”
Norquist's group challenges politicians and candidates for office to sign a pledge asserting that they will not raise taxes overall. Of the members of the 114th Congress, 218 U.S. House members and 49 U.S. Senators have signed the pledge.
While Trump’s tax plan is not without tax increases, Americans for Tax Reform's analysis deemed the plan “tax neutral,” meaning any increases are offset by deductions.