Trump Announced Another New Tax Plan On September 15

Donald Trump Recently Announced The Third Version Of His Tax Plan. Then-Republican presidential candidate Donald Trump first outlined his tax reform plan on September 28, 2015, in remarks at Trump Tower. Mainstream media responded by explaining that the plan would overwhelmingly benefit major corporations and the very wealthy while ballooning the deficit. On August 8 of this year, the GOP nominee delivered a speech focused on the economy in which he outlined a new agenda for tax reform. This revised version of Trump’s plan would create three individual tax brackets at 12, 25, and 33 percent for undefined levels of income, and would sharply drop taxes on corporations from 35 percent to 15 percent. Trump updated his new tax and economic policy proposals once again during a September 15 speech, focusing on his commitment to “shrink nondefense spending,” his proposal to reduce federal government spending by 1 percent annually, and his proposal to cap some deductions available to some high-income Americans. Economists and experts concluded that Trump’s revisions to his economic and tax plans were meant to prove his “conservative bona fides” and commitment to discredited supply-side economic policies, but they said they remained “light on details” and pushed “pathetic, even embarrassing” falsehoods. [Media Matters, 9/28/15, 8/9/16, 9/15/16]

Latest Tax Foundation Analysis Shows Middle Class Would Gain Little From Trump Plan, Deficit Would Increase By Trillions

Tax Foundation: Trump’s Latest Plan May Increase The Deficit By As Much As $5.9 Trillion Over Next Decade. The right-leaning Tax Foundation released its analysis of Trump’s latest revised tax plan on September 19, concluding that his plan could reduce federal revenue by up to $5.9 trillion over the next decade. Even after accounting for what the foundation calls a “dynamic revenue impact” -- an optimistic analysis that assumes tax cuts spur economic growth -- Trump’s renewed tax reform agenda could add more than $3.9 trillion to the national debt over the next 10 years. The debt accumulation in Trump’s new tax plan is less than the $10 to $12 trillion in additional debt the foundation projected in a September 29, 2015, analysis of his original plan, but is still roughly 10 times more costly than Democratic presidential nominee Hillary Clinton’s tax plan, according to the Tax Foundation. As was the case with Trump’s initial plan, the analysis showed that the largest beneficiaries of his proposed tax cuts are at the top of the income distribution, and much of the savings in Trump’s latest plan were achieved by reducing the size of tax cuts for low- and middle-income earners:

[Tax Foundation, 9/29/15, 9/19/16, 1/26/16]

Media Highlight Tax Foundation Findings To Blast Trump’s Costly Plan As “A Multitrillion-Dollar Gift To The Rich” That “Screws The Middle Class”

NPR: Trump’s New “Less Progressive” Tax Plan Boosts Incomes “For The Richest Americans” Most. NPR summarized the Tax Foundation’s findings in a September 19 article, noting that, while Trump’s new plan is projected to cost less than his first attempt, it “would also make the tax code less progressive” and benefit top-income earners more than the bottom 80 percent of income earners. The article concluded that the revised tax plan, considered alongside Trump’s trade proposals, “could easily damage the economy.” [NPR, 9/19/16]

WSJ: Top 1 Percent Of Earners See Five Times More Tax Savings Than Bottom 80 Percent Of Households. The Wall Street Journal also reported on the Tax Foundation’s analysis, noting that “after-tax income” for the highest-income households would “increase by at least 10.2 [percent],” whereas the bottom 80 percent of households would receive a less than 2 percent cut in taxes:

The analysis from the conservative-leaning Tax Foundation shows that Mr. Trump’s plan would lower federal revenue collections by at least 10.9% and deliver the biggest benefits to the highest-income households. Without accounting for economic growth, the top 1% of households would see their after-tax income increase by at least 10.2%, while the bottom 80% of households would get less than a 2% boost. [The Wall Street Journal, 9/19/16]

CNNMoney: “No Matter How You Measure It … Trump’s Tax Plan Will Still Cost A Lot.” CNNMoney explained that “confusion caused by the Trump campaign’s refusal to clarify his plan for business taxes” led to an unusual $1.5 trillion range in the Tax Foundation’s estimation for lost revenue under the plan. Its reporting also pointed out that, regardless of which Tax Foundation score was considered, Trump’s revised plan “will still cost a lot” and “will still benefit the rich more than anyone else.” [CNNMoney, 9/19/16]

FiveThirtyEight: “Don’t Believe Trump’s Tax Math -- Or Anyone Else’s.” FiveThirtyEight economics writer Ben Casselman analyzed Trump’s plan in light of the Tax Foundation’s new report and explained that the foundation’s “dynamic scoring” methodology -- which Trump’s plan also utilizes-- could actually overstate estimated economic growth spurred by the proposals. Casselman noted that differences in how economists attempt to accurately estimate how the market may react to tax cuts, along with a lack of clarity from the Trump campaign itself on a key part of the plan, means the true impact of the revised plan could be more economically detrimental than the Tax Foundation analysis suggests. [FiveThirtyEight, 9/19/16]

Wash. Post: Trump’s New Plan “Now Skew[s] Even More To Helping The Highest-Earning Americans.” Washington Post economic policy correspondent Jim Tankersley blasted Trump’s “revamped tax plan” for further reducing tax cuts for middle-class Americans and “now skew[ing] even more to helping the highest-earning Americans.” Tankersley noted that the Tax Foundation scores of Trump’s tax benefits and job creation prospects “either contradict or call into question” the nominee’s claim in his September 15 remarks that his new plan would create millions of new jobs and “deliver large benefits for middle-income taxpayers.” [The Washington Post, 9/19/16]

Slate: Trump’s Tax Cuts Are “A Multitrillion-Dollar Gift To The Rich” And “Utterly Worthless To The Middle Class.” Slate economics correspondent Jordan Weissman referred to the tax cuts and child care benefits Trump has directed to middle-income earners as “basically worthless,” adding that under Trump’s economic plan middle-income earners “get very little, while upper-income Americans reap a windfall.” Weissman also warned that the Tax Foundation’s “dynamic scoring” methodology was “extremely hypothetical” and suggested that the group’s static analysis offered a more realistic estimate of how much debt could accumulate under Trump’s plan. [Slate, 9/19/16]

ThinkProgress: “Trump’s New Tax Plan Screws The Middle Class.” ThinkProgress economic policy editor Bryce Covert blasted Trump’s tax plan for giving substantial tax breaks to top-income earners while doing little to help middle-income Americans, as he claimed it would. Covert explained that, contrary to Trump’s repeated public statements that his plan would focus on helping middle-income earners the most, “one thing is clear: the middle class will get less than Trump had originally planned, while the rich will get more.” [ThinkProgress, 9/19/16]

CNBC: Trump’s New Plan “Would Help The 1% Most.” CNBC reporter Robert Frank reported that the Tax Foundation analysis illustrated that Trump’s revised tax plan would offer a greater tax break to the top 1 percent of earners than to middle-class earners. Frank explained that the estimated disproportionate benefits from Trump’s tax plan result in an “average cut of at least $122,400” for the top 1 percent of income earners, “while the middle class could get a break of less than $500.” [CNBC.com, 9/19/16]