moldyoldy

Here we are, talking about whether Donald Trump stepped over the line when he insulted Megyn Kelly, or John McCain, or illegal immigrants from Mexico.

But the real scandal is sitting there, pretty much ignored.

Trump, who is currently in poll position for the Republican presidential nomination, is proposing draconian changes to the U.S. tax code that would gut the federal budget, send deficits skyrocketing, and drive up the price you’d have to pay for everything from coffee to iPhones.

Meanwhile, these changes would save his own family an estimated $2 billion or more — probably much more — in taxes.

But, hey, what is that compared to Megyn Kelly’s monthly cycle, right?

Trump’s campaign did not immediately respond to requests for comment.

Trump, in his 2011 political manifesto “Time To Get Tough,” said he wants to abolish the inheritance tax completely, even on kids inheriting billions of dollars from their Old Man.

Let’s call this proposal “Ivanka’s Law.”

He also said he wants to scrap the corporation tax — completely. And to slash the top rate of income tax by two-thirds, to 15% from 43%. That wouldn’t just apply to earned income. It would also apply to passive income — for example, oh, rental income earned by a billionaire landlord.

According to Trump’s own calculations, his estate contains at least $5.5 billion in net tangible assets. Now it’s true that we haven’t seen his most recent will, and we don’t know how exactly Trump plans to dispose of his fortune when he finally buys that big casino in the sky. But he’s 69 years old and so this isn’t purely academic.

Scrapping the 40% inheritance tax will save his family a lot of money on what he leaves them. Indeed if he leaves them that $5.5 billion, it would save them about $2.2 billion in taxes.

That’s an extra $400 million or so for each of his five children.

How’s that for estate planning?

Meanwhile scrapping the corporation tax, and slashing income taxes, would further save the family a fortune. We don’t know exactly how much but the number must be at least $100 million a year.

How? Simple. Trump says his businesses are worth $10 billion (including intangibles such as the Trump “brand”). Logically they must be generating hundreds of millions of dollars a year in gross income. Some or possibly most of that must be subject to corporation tax, and some of it to personal income tax rates as well.

Right now someone who is paying corporation tax (at 35%) and income tax (at 43%) is only taking home 37 cents on the dollar. Scrapping those and replacing them with a 15% tax leaves you 85 cents instead — more than twice as much.

We don’t know about Trump’s tax planning or how his businesses are structured (legally) to avoid taxes. But there is only so much even the cleverest accountants can do.

What would all these changes do to the federal budget? Trump hasn’t told us, but we are not blind. Here are some quick back-of-the-envelope calculations, based on Trump’s own proposals and official U.S. government data:

Trump wants to replace the current income tax system with four progressive rates, from 1% up to 15%. Applying these rates to the IRS “statement of income” from 2012, the most recent year available, would have slashed federal income tax revenues by more than half, from $1.2 trillion to just $530 billion.

Scrapping the estate tax ($14 billion) and the corporation tax ($240 billion) as well would have resulted in a $900 billion collapse in federal revenues.

Meanwhile Trump says he wants to offset this in part by a 20% tariff on all imports. According to the U.S. Census, we imported $2.8 trillion in 2012, so a 20% tax would, crudely calculated, generate $560 billion. That would, of course, drive up the costs of imports, including many consumer products.

The net result? By this math, Trump’s proposals would have increased the 2012 federal deficit alone by a third, or $360 billion, to nearly $1.5 trillion.

This is the same man pounding President Barack Obama for raising the national debt so much.

Yes, these are only rough calculations. Trump’s tax cuts might have stimulated more economic activity, and that would have added to tax revenues. But as he wants a top tax rate of 15%, he’d have to stimulate $1 trillion in extra economic activity just to add $150 billion to the federal bottom line.

His tariff would have brought jobs home, raising income tax receipts. But then Uncle Sam would get less income from the tariffs.

Some of Trump’s ideas have individual merit. (There is, for example, a case in favor of some tariffs). But what matters if how various changes would fit together. Trump’s package as a whole would be massively regressive and plutocratic. It would revert the U.S. economy to the era of the “robber barons.”

How serious is this? Much more than most realize. Trump is still a long-shot for the Republican nomination. But he is leading in the polls. And whatever happens in the primaries, he is almost guaranteed to emerge with a lot of political leverage. The eventual Republican nominee, if it isn’t Trump, will badly need his endorsement — and his promise not to run as a spoiler third party candidate. Trump can extract all sorts of concessions in return.

Many of these policies are already popular in a Republican party that controls both houses of Congress. Don’t laugh too hard.

TroubleshooterTim Loc: People's Republic of Oregon

Then there is the other extreme. Bernie Sanders 90% marginal tax rate.

http://www.msnbc.com/rachel-maddow-show/the-tax-rates-dont-cause-bernie-sanders-flinch

MajorAhrens Loc: Myrtle Beach

Moldy, the old green eyed monster has a tight grip on you. Don't hate the player, hate the game.

Coos Bay Tom Loc: coos bay oregon

The game sucks. The rich get richer and give us hollow promises that we will get rich too if we vote the way they wish. They blame their failures on others and urge us to vote out our best hopes. We go along with the status quo out of fear of being labeled and we get labeled anyway. WE have Green eyed monsters and 500 lb gorillas running the show.

PeterS

The game is to pay as little as possible. The Donald has made that pretty clear...

moldyoldy

Trump has huge plans to fix the US. He will make america great again. i have great ideas, of which i am not at liberty to discuss, but it will be huge. you will not believe what i will do for you, just wait and see. Nobody else has such a detailed plan as i have just laid out.

TroubleshooterTim Loc: People's Republic of Oregon

"I'm not at liberty to discuss. . ." ? I have never heard him say such a thing, I'm fact he'll not shut up.

He outlines everything in good detail in his 2011 book
Time to Get Tough: Making America Great Again

To claim he has no plan is to ignore what he has said and stood for. Has anybody asked Bernie Sanders what his plan is?

jer48 Loc: perris ca

you sound like a true lib whats wrong with leaving your money to your family ? the government didnt make it for you no matter what obummer says

jer48 Loc: perris ca

vote America not party

jer48 Loc: perris ca

I agree 100% no one else has laid out a plan folks need to listen up folks are afraid of Donald

Ricko Loc: Florida

MoldyOldy-believe it will take an outsider to make any significant changes in the bureaucracy in D.C. . Trump may not have all the answers but he will surround himself with people who do. Politicians with flowery rhetoric have put us in an untenable position and we must change course. Who can best do the job of restoring this country to its greatness, a successful businessman or another politician ? Who would you suggest we elect as our next leader? Good Luck America !!!

moldyoldy

Coos Bay Tom Loc: coos bay oregon

also vote with your conscience.

:thumbup: