• Monthly
  • $25
  • $50
  • $100
  • $other
  • use PayPal

ONE WEEK TO DOUBLE YOUR DONATION!

A generous CounterPuncher has offered a $25,000 matching grant. So for this week only, whatever you can donate will be doubled up to $25,000! If you have the means, please donate! If you already have done so, thank you for your support. All contributions are tax-deductible.
FacebookTwitterRedditEmail

Trump’s Tax Plan: a Billion or Three for Guys Like Him

What’s the largest personal stake a U.S. president has ever had in legislation he signed into law? Whatever it was, it’ll be dwarfed by what Donald Trump’s signature will be worth — to himself — if Congress passes his proposed tax plan and puts it on his desk.

If that happens, Trump will be effectively cutting himself a check from the U.S. Treasury for several billion dollars.

Call me cynical, but it seems that’s exactly what Trump has in mind. His plan just fits his tax situation — or what we know of it, without access to his tax returns — too perfectly.

The president’s tax proposal eliminates two taxes that mostly benefit the wealthy, and cuts a third tax roughly in half. That would bestow a windfall worth billions on the Trump family.

First, there’s the elimination of the alternative minimum tax, or AMT.

The AMT applies to taxpayers whose income tax liability otherwise would be reduced excessively by certain deductions, including deductions commonly claimed by real estate owners like Trump. It’s like an alternative tax system in which the rates are lower but fewer deductions are allowed.

The one glimpse we’ve had of Trump’s tax returns suggests he stands to benefit massively from the repeal of the AMT. In 2005, Trump’s income exceeded $150 million, but his regular tax liability was just $5.3 million — that’s barely a 3.5 percent tax rate.

But the AMT increased Trump’s tax liability that year by over $31 million. Had Trump’s tax plan been in effect in 2005, it would’ve saved him that $31 million.

Still, that’s chump change in comparison to the tax windfall he hopes to bestow upon himself by cutting the top tax rate on the bulk of his income by more than half, from nearly 40 percent to 15.

We’re not talking about the corporate tax rate here. Trump could reap a tidy personal benefit from slashing the corporate income tax too, but the far bigger prize in his plan is its treatment of income from businesses that don’t pay corporate taxes.

Under current law, the income of those businesses is taxed to their owners at individual income tax rates. Under Trump’s plan, income from those businesses would receive preferential tax treatment, with a maximum tax rate of 15 percent.

That would be the final act in turning our nation’s tax policy on its head.

In 1980, before Ronald Reagan’s election, the maximum rate on workers’ wages — earned income — was less than the maximum rate applicable to all other types of income except long-term capital gains.

Under Trump’s tax plan, the maximum tax rate workers pay, after accounting for employment taxes, will be higher than the rate applicable to any other type of income.

That means no matter how Trump invests his billions — in real estate, bonds, stocks, business ventures, etc. — the income he generates would be taxed at a rate lower than what workers pay on their wages.

Trump’s preferential rate for business income is unprecedented. Is it a coincidence that the first politician to propose it just happens to be a real estate magnate with interests in literally hundreds of unincorporated businesses?

The biggest tax windfall Trump hopes to secure for himself, however, is one he won’t live to enjoy. I’m referring to the estate tax, of course — a federal levy on estates worth over $5.5 million for individuals.

Trump’s plan would eliminate that tax, no matter how large the estate. For Trump, that would mean as much as $1.4 billion on an estate estimated by Forbes at $3.5 billion.

The bottom line: If Trump’s tax plan passes, he’ll have secured for himself billions in tax benefits in less than a year as president. Not bad work if you can get it, huh?

Bob Lord is a veteran tax lawyer who practices and blogs in Phoenix, Arizona. He’s an associate fellow of the Institute for Policy Studies.

Distributed by OtherWords.org

More articles by:

Bob Lord is a veteran tax lawyer who practices and blogs in Phoenix, Arizona. He’s an associate fellow of the Institute for Policy Studies. 

bernie-the-sandernistas-cover-344x550
Weekend Edition
October 18, 2019
Friday - Sunday
Anthony DiMaggio
Trump as the “Anti-War” President: on Misinformation in American Political Discourse
Jeffrey St. Clair
Roaming Charges: Where’s the Beef With Billionaires?
Rob Urie
Capitalism and the Violence of Environmental Decline
Paul Street
Bernie in the Deep Shit: Dismal Dem Debate Reflections
Andrew Levine
What’s So Awful About Foreign Interference?
T.J. Coles
Boris Johnson’s Brexit “Betrayal”: Elect a Clown, Expect a Pie in Your Face
Joseph Natoli
Trump on the March
Ashley Smith
Stop the Normalization of Concentration Camps
Pete Dolack
The Fight to Overturn the Latest Corporate Coup at Pacifica Has Only Begun
Jeremy Kuzmarov
Russophobia at Democratic Party Debate
Chris Gilbert
Forward! A Week of Protest in Catalonia
Daniel Beaumont
Pressing Done Here: Syria, Iraq and “Informed Discussion”
Daniel Warner
Greta the Disturber
M. G. Piety
“Grim Positivism” vs. Truthiness in Biography
John Kendall Hawkins
Journey to the Unknown Interior of (You)
Christopher Fons – Conor McMullen
The Centrism of Elizabeth Warren
Nino Pagliccia
Peace Restored in Ecuador, But is trust?
Rebecca Gordon
Extorting Ukraine is Bad Enough But Trump Has Done Much Worse
Kathleen Wallace
Trump Can’t Survive Where the Bats and Moonlight Laugh
Clark T. Scott
Cross-eyed, Fanged and Horned
Eileen Appelbaum
The PR Campaign to Hide the Real Cause of those Sky-High Surprise Medical Bills
Olivia Alperstein
Nuclear Weapons are an Existential Threat
Colin Todhunter
Asia-Pacific Trade Deal: Trading Away Indian Agriculture?
Sarah Anderson
Where is “Line Worker Barbie”?
Brian Cloughley
Yearning to Breathe Free
Jill Richardson
Why are LGBTQ Rights Even a Debate?
Jesse Jackson
What I Learn While Having Lunch at Cook County Jail
Kathy Kelly
Death, Misery and Bloodshed in Yemen
Maximilian Werner
Leadership Lacking for Wolf Protection
Arshad Khan
The Turkish Gambit
Kollibri terre Sonnenblume
Rare Wildflower vs. Mining Company
Dianne Woodward
Race Against Time (and For Palestinians)
Norman Ball
Wall Street Sees the Light of Domestic Reindustrialization
Ramzy Baroud
The Last Lifeline: The Real Reason Behind Abbas’ Call for Elections
Binoy Kampmark
African Swine Fever Does Its Worst
Nicky Reid
Screwing Over the Kurds: An All-American Pastime
Louis Proyect
“Our Boys”: a Brutally Honest Film About the Consequences of the Occupation
Coco Das
#OUTNOW
Cesar Chelala
Donald Trump vs. William Shakespeare
Ron Jacobs
Calling the Kettle White: Ishmael Reed Unbound
Stephen Cooper
Scientist vs. Cooper: The Interview, Round 3 
Susan Block
How “Hustlers” Hustles Us
Charles R. Larson
Review: Elif Shafak’s “10 Minutes 38 Seconds in This Strange World”
David Yearsley
Sunset Songs
October 17, 2019
Steve Early
The Irishman Cometh: Teamster History Hits the Big Screen (Again)
FacebookTwitterRedditEmail