Thursday, October 1, 2015

Trump's Tax Plan...Telling the Gullible What They Want To Hear
By: Diane Sori / The Patriot Factor / Right Side Patriots on

“I’m the only one who’s honest...I fight like hell to pay as little as possible. Can I say that? I’m not a politician.” 
- Donald Trump's words to the affect that he is actually shirking his taxpayer responsibilities to benefit himself

It's a con job...NOTHING but an early Christmas present for the wealthiest Americans...masking what amounts to just another liberal tax plan...a plan that outlines ways he will supposedly get rid of tax credits and deductions in exchange for cuts in the individual and corporate tax rates...yet Donald Trump's newly rendered tax proposal actually does NOTHING but pander for votes with his promises to close loopholes on the rich, lower overall taxation rates, balance the budget, and 'free-up' if you will more than half of American households from paying any federal tax at all, which, by the way, has already been done by Obama...more on that in a bit. And Trump's doing so while claiming that even with his cutting taxes across the board he can still regrow the American economy at the same other words he's telling the gullible masses the two words they so desperately want to hear...less taxes...but notice he's NOT saying one word of substance about how he would cut out-of-control government spending.

And so Trump CANNOT do what he claims, because you cannot regrow the economy by cutting tax rates that result in a shrinking of the all-important tax base while at the same time coupling that with a lower corporate tax rate as you push for a 'revenue neutral' tax plan...and know that Trump's tax plan would actually add trillions of dollars to the national debt, and as a businessman he knows that to be fact. So something Trump knows, but is hoping that most people do NOT know, is that a taxing procedure that allows the government to still receive the same amount of money despite changes in tax laws simply means that the government is lowering taxes for one group of people while raising taxes for another group of people...a typical liberal maneuver. And it's this shifting of the burden that allows the revenue the government receives to remain unchanged...or in other words 'neutral'... which is NOT necessarily a good thing, especially when someone will have to to pay for the half of all American households Trump will have paying NO taxes at all. Well, guess who will have to pay...once again it will be the already bled-dry middle class who will be footing the bill...and Trump knows it...and Trump does NOT care.

And as for Trump's claim that his plan is 'revenue neutral,' lost revenue still must be made up and his proposal to do so by eliminating some deductions does have a bit of merit, but whatever merit it has is actually negated by the fact that elimination of any tax deductions means a huge increase in taxes for the middle class who rely on those deductions to help keep their taxes paid to a somewhat manageable level. And while Trump has ruled out getting rid of deductions for home mortgage interest as well as for charitable gifts...which together are worth more than $120 billion a year...home mortgages coupled with soon to rise interest rates actually remain one of the most costly expenditures people have, and is something that continues to burden the middle class more than anything else.

Also, knowing that Trump's plan is simply NOT workable without its increasing the deficit even more...and as per scoring by the Tax Foundation (a well-respected nonpartisan source) that increase would add a staggering $10 trillion to the national debt over a decade...meaning that for Trump to get anywhere close to breaking in his afore mentioned 'revenue neutral' promise...would require the possibility of eliminating all deductions for state and local taxes, and maybe even taxing retirement savings in pensions and 401(k)s which would hurt again mostly those in the middle class. Now add in that even if Trump's tax plan could somehow prove to be 'revenue neutral,' and even with his proposed but limited cuts in deductions, it still would NOT bring in enough money to balance the budget... something he said he will do...because at the end of this fiscal year the Congressional Budget Office projects the deficit will be $426 billion. That means that Trump would have to find that much spending to cut to balance America's books and NOTHING he proposes comes even close to cutting the amount of money that's being spent, so Trump is doing NOTHING but trying to repackage a mediocre liberal tax plan at best to look like he's some sort of genius economist...which he is NOT. Remember, there is a huge difference between a businessman and an economist.

And Trump's trying to herald what amounts to a simple numbers shift on paper, has his proposal to decrease the number of tax rates from the current seven to four, at 0, 10, 20 and 25 percent respectively, proving he is just taking from 'Peter to pay Paul.' And how so...because a change such as the one Trump is proposing would somewhat reduce taxes and allow some deductions to be kept for middle-income wage earners in the short term while allowing those who make enough money to fall into the current top tax bracket and who pay 39.6 percent on income above $413,000 per year to actually be the ones to benefit the most, simply because of the decrease in the number of and cap limits to the tax rates. This means that those individuals would have to pay at most just 25 percent instead of the currently paid 39.6 percent on any income now set under Trump's plan at above $300,001, which still comes out to way less than they are paying now. In fact, according to San Diego State University tax and accounting professor Steve Gill, Americans who make more than $200,000 a year would actually pay $400 billion to $500 billion less in taxes annually under Trump's plan than under the current system ...meaning middle-income wage earners will be the ones having to make up the difference...and again Trump knows that.

But at the heart of Trump's very unrealistic smoke and mirrors tax plan is his wanting all individuals making less than $25,000 and all married couples making less than $50,000 to NOT have to pay any federal taxes at all, which his detractors claim would jump the current number of those paying NO taxes from 36 percent of all American households up to a whopping 50 percent...translating into 75 million people contributing NOT a dime into our tax system. But what Trump does NOT want you to know is that according to the IRS, 76 percent of people who earn $25,000 or less already pay NO federal income taxes, so in reality, Trump isn’t giving anything to most people who earn $25,000 or less that they don’t already have, and eighty-three percent of people who earn less than $30,000 are already NOT paying federal income taxes...Trump is just adding even more perecentage wise to those existed numbers while trying to sound noble as he tells people what they want to hear. In other words NOT only is he adding to the 'sponge' roll he is following Obama's plan to turn us into a pure welfare state with him as head honcho.

And Trump closes his eyes to the fact that as of today the top 1% of wage-earners still pay 24.2% of all taxes with the bottom 20% paying a miserly 0.4% because of the numerous deductions afforded them...deductions like the 'Earned Income Tax Credit.' The EITC is a refundable tax credit for low-to-moderate-income working individuals and couples, which is beneficial to those with children as the amount of their return depends on the recipient's income and number of children. And this is where many of 'the element' love to screw both the government and we in the more children they have, the more of our hard-earned taxpayer monies they get back. And Trump, of course, has NO plans to do away with the EITC, because it allows him to reel in bleeding heart liberal voters while doing so once again at the expense of mostly the middle-income taxpayer.

And Trump can bloviate all he wants that his plan, "reduces or eliminates most of the deductions and loopholes available to special interests and to the very rich,” but the truth is that his plan does NOTHING of the sort. Saying he would reduce long-term capital gains taxes (that being the profit realized on the sale of a non-inventory asset that was purchased at a cost amount that was lower than the amount realized on the sale) to 20 percent, from the current 24 percent, while eliminating the marriage penalty tax and the estate tax...or as some call it 'the death tax'...Trump forgets that both of those taxes benefit the wealthy more than anybody else. And he himself is a perfect case in point for while Trump wants to eliminate the estate tax...sounds good doesn't it...but the reality is that this would allow him and others of his wealth to pass on their estates to their heirs completely tax-free, translating for Trump into savings worth billions what with his current estimated net worth to be more than $10 billion. And while I begrudge NO one the right to keep what they have earned and firmly believe that the government has NO right to people's personal estates...again the biggest winners in this money saver is people like Trump...wealthy beyond most people's comprehension...and notice how Trump focuses on this aspect of his tax plan as it's to his personal benefit to do so.

Now before I get into the business aspects of Trump's tax plan, let it be understood that even if Trump's plan did put the burden on the wealthy... which it clearly does NOT...the fact is that the wealthy should NOT have to shoulder the entire tax burden for it's the wealthy who are this county's main job creators and providers and it's the wealthy who actual take care of and foot the bill for the poor. And if the wealthy are forced to surrender vast amounts of their wealth they cannot create jobs and businesses. And if truth be told, each and every American should have 'skin in the game' if only to prove they are a valuable part of our country.

And like many other Trump bloviations that are part of his tax plan, it will be him who will line his pockets as our middle class pockets get turned inside out, because the numbers he is presenting simply do NOT add up. One case in point to consider is that while Trump says he will eliminate the 'carried interest tax preference'...loopholes actually...which benefits a small number of Wall Street hedge fund managers and other investment managers by helping them to keep their taxes low, Trump's wanting to raise taxes on fees such managers collect...fees known as carried interest...would allow these managers to actually see a net tax cut...thanks to Trump's addition of a 14 percent cut in the top rate they would pay. So, any monies he gets from fees will end up being NOTHING but a mere drop in the bucket, and you can be sure Trump's personally used loopholes will remain solidly in place.

Now as to the business/corporate aspects of his tax plan, Trump claims his plan would cap the tax rate for all businesses...NO matter how big or 15 percent, down from the current 35 percent, which he feels would in turn incentivize American corporations who have stashed cash a tune of $2.5 bring those monies back to the U.S. And Trump wants to impose a one-time 10 percent tax on companies' overseas profits, while limiting write offs for interest expenses. And under his tax plan, 'so-called' partnerships and S-corps would NO longer pay individual tax rates, and corporate loopholes that cater to special interests would also be eliminated Trump says, replaced with a phase-in of a reasonable cap...whose figure also has yet to be announced...on the deductibility of business interest expenses alone. Trump would also continue to tax foreign earnings of U.S. companies but would allow those companies to take a credit for corporate taxes they paid abroad.

But know there are certain critical downsides to the economic aspects of Trump's plan with the first being that he wants tariffs placed on foreign imports, the dollar amount of those tariffs has NOT yet been set...notice how NO tangible dollar amounts of anything Trump proposes have been set. And while tariffs could possibly make up for some revenue that would be lost because of a shrinking tax base, it would also raise the cost of imported goods in the U.S., thus causing economic hardship to the purchaser, and would probably set off a massive trade war with China, Japan, and other nations we trade with.

So while Trump and his blind followers sing the praises of his tax plan, and while certain misguided talking heads do so as well, the truth is it is a horribly flawed plan, liberal in its concepts, pandering in its application, and it's a plan that could actually bankrupt this country because Trump is knowingly decreasing the much-needed tax base while increasing the tax burden on the individual... especially the middle class individual who is already taxed beyond belief while taking away many of their much needed deductions. And add into this the fact that with Trump being as wealthy as he is...with Trump being born into wealth...he has NO clue whatsoever what it means to be middle class and struggling. Instead his plan favors the 'sponges' and gives breaks to those wealthy like him...taking a page right out of the Keynesian economic playbook. But what can you expect from a man who is Democratic in his leanings but who now, when it suits his purposes, dresses in Republican clothing.