As expected, a left-leaning think tank had serious problems with Donald Trump and his “huge” tax plan, published on his website. The first real and serious public policy position staked out by Trump was attacked yesterday by Citizens for Tax Justice (CJT), which said in an analysis that the tax plan would “Cut personal income taxes by nearly $11 trillion over the next decade. While the plan would cut taxes on all income groups, by far the biggest beneficiaries would be the very wealthy.” Of course it would benefit the wealthy, of which The Donald is one. However, lending credence that the analysis was objective, a right-leaning, tax think-tank group, The Tax Foundation, virtually agreed with the left-leaning group. In fact, a reading of the the right-wing analysis shows that the left-leaning group may have been “too conservative” in its analysis.
The conservative think-tank, The Tax Foundation, offered their answer. The group said that without factoring in growth, Trump’s plan would add $11.98 trillion to the 10-year deficit, which now stands at some $18 trillion. Of course Trump would say, but factor in the growth. Once the growth that would result from slashing taxes are factored in, it would “only cost $10.14 trillion.”
- Mr. Trump’s tax plan would substantially lower individual income taxes and the corporate income tax and eliminate a number of complex features in the current tax code.
- Mr. Trump’s plan would cut taxes by $11.98 trillion over the next decade on a static basis. However, the plan would end up reducing tax revenues by $10.14 trillion over the next decade when accounting for economic growth from increases in the supply of labor and capital.
- The plan would also result in increased outlays due to higher interest on the debt, creating a ten-year deficit somewhat larger than the estimates above.
- According to the Tax Foundation’s Taxes and Growth Model, the plan would significantly reduce marginal tax rates and the cost of capital, which would lead to an 11 percent higher GDP over the long term provided that the tax cut could be appropriately financed.
- The plan would also lead to a 29 percent larger capital stock, 6.5 percent higher wages, and 5.3 million more full-time equivalent jobs.
- The plan would cut taxes and lead to higher after-tax incomes for taxpayers at all levels of income.
CTJ’s analysis shows that if fully implemented in tax year 2016, Trump’s tax proposals would likely reduce revenues by almost $900 billion a year. Every income group would see an income tax cut, on average, under Trump’s plan:
- The poorest 20 percent of Americans would see a tax cut averaging $250.
- Middle-income Americans would see an average tax cut of just over $2,500.
- The best-off 1 percent of taxpayers would enjoy an average tax cut of over $184,000.
The best-off 1 percent would receive the biggest share of the income tax cuts under the Trump plan: fully 34 percent of the tax cuts would go to this small group of the wealthiest Americans. By contrast, the poorest 20 percent of Americans would see just 1 percent of the benefits from Trump’s tax cuts.
Al Hunt said on Bloomberg labeled the tax plan a “fraud.” (See video)
Either way you cut, the Trump tax plan is a “disaster” which only benefits the wealthy and does nothing for the country.