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Trump’s Tax Plan: The Grifters Do ‘Tax Reform’

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Trump’s Tax Plan: The Grifters Do ‘Tax Reform’

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Mnuchin tax plan

If you were paying attention to what we learned about Donald Trump during the 2016 campaign, then you know that the president of the United States was once the impresario of a student-swindling Trump University, the founder of a Trump Foundation designed for tax evasion and illegal self-dealing, and the chief executive of a Trump Organization that has long relied on various techniques of grifting, from rip-offs of workers and contractors to serial bankruptcies.

And if you know all that, then you cannot be surprised by the way that he and his family have conducted themselves during the first 100 days of his presidency, which is also the way they will behave until they leave or are removed from the White House. They have misused the office of the president to enrich themselves in ways that none of Trump’s predecessors, not even the most venal, could have imagined doing.

Nor can you be surprised that this grasping figure and his appointed cronies, notably Treasury Secretary Steve Mnuchin, have floated a tax “reform” that will enrich the very wealthiest Americans by trillions of dollars, while decimating necessary government functions and depriving millions of working families and the poor of health care. Should this tax plan become law, it would result in thousands of people dying in order to transfer more money to those who already have too much.

While Trump has long refused to abide by the customs and traditions that dictate tax disclosure by presidents and presidential candidates, we know enough about his taxes to see that his new plan, although sorely lacking in detail, will serve his personal interest above all. (No, he didn’t put “America first.”) Although tax policy is often complicated and numbingly dull, the changes that Trump is seeking to benefit himself are really quite simple.

The plan’s biggest “reform” is to slash the corporate tax rate from 35 percent to 15 percent — including the rate on so-called “pass-through” companies like more than 500 such firms owned by Trump, which allow him to receive business income taxed at the lower rate instead of wages. It also cuts the personal income tax rate on the highest earners such as Trump, including the 3.8 percent Obamacare tax on unearned income. It eliminates the alternative minimum tax, which required Trump to pay $31 million in 2005, according to a tax return that leaked last year. And the plan establishes a “territorial” tax system leaving all the profits earned by the Trump Organization in foreign countries.

He aims to take care of his children, too, if not yours or America’s — so his plan also eliminates the estate tax entirely, allowing his billions to be inherited absolutely tax-free by Ivanka, Don Jr., Eric, Barron, and perhaps even Tiffany.

Now if you’re a middle class or working class taxpayer, you may recall that Trump promised that as president he would be independent of banks like Goldman Sachs and close the gaping “carried interest” loophole that benefits billionaire hedge fund managers. The author of his tax plan, Treasury Secretary Mnuchin, vowed last winter that Trump’s reforms would not disproportionately benefit the rich. In fact, he went further:

“Any reductions we have in upper-income taxes will be offset by less deductions, so there will be no absolute tax cut for the upper class. There will be a big tax cut for the middle class, but any tax cuts we have for the upper class will be offset by less deductions that pay for it.”

That was then, this is now — which with Trump usually means that he was lying.

He appointed two former Goldman Sachs bankers, Mnuchin and National Economic Council chief Gary Cohn, to write the tax “reform,” which doesn’t mention the carried interest loophole at all. They cut taxes so drastically on hedge fund managers (and every other corporate and finance billionaire) that the carried-interest scam might no longer matter.

As for that pledge repeated so often by Trump and then Mnuchin to cut middle-class taxes, the Treasury Secretary was unable to say this week whether taxation on middle class and working class families will go down — or up, as some analysts of his plan warn they might. “I can’t make any guarantees,” Mnuchin said when pressed by reporters.

So if you’re a working class or middle class taxpayer, this “reform” offers nothing so far except uncertainty. When the details of the Trump tax plan finally emerge, you may discover that its collapsing of brackets has actually raised your taxes, and that its elimination of deductions for state and local taxes or student loan payments has left you owing more to the IRS.

But the latest polls indicate that if you’re a Trump voter, you don’t mind being conned — perhaps because you love watching a president who picks on immigrants and refugees, irritates liberals, and bombs a Syrian airstrip. Let’s hope you still feel happy when the bill comes due.

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Joe Conason

A highly experienced journalist, author and editor, Joe Conason is the editor-in-chief of The National Memo, founded in July 2011. He was formerly the executive editor of the New York Observer, where he wrote a popular political column for many years. His columns are distributed by Creators Syndicate and his reporting and writing have appeared in many publications around the world, including the New York Times, the Washington Post, The New Yorker, The New Republic, The Nation, and Harpers.

Since November 2006, he has served as editor of The Investigative Fund, a nonprofit journalism center, where he has assigned and edited dozens of award-winning articles and broadcasts. He is also the author of two New York Times bestselling books, The Hunting of the President (St. Martins Press, 2000) and Big Lies: The Right-Wing Propaganda Machine and How It Distorts the Truth (St. Martins Press, 2003).

Currently he is working on a new book about former President Bill Clinton's life and work since leaving the White House in 2001. He is a frequent guest on radio and television, including MSNBC's Morning Joe, and lives in New York City with his wife and two children.

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41 Comments

  1. Dominick Vila April 29, 2017

    The fact that a man whose business acumen includes multiple bankruptcies and dependence on Russian oligarchs to stay afloat proposed tax “reform” (read hand out to the wealthy), that will lower the tax rate of profitable corporations like Exxon, WalMart, MICROSOFT, Google, and so many others to 15%, while the average engineer or teacher pays 25% does not surprise me in the least. In fact, it is to be expected. It also does not surprise me that the overwhelming majority of Trumpeters that delivered Trump’s Electoral College victory continue to support him, and plan to re-elect him. Ignorance, naivete, and hatred of anything that does not contribute to the determination of a minority of our population to take the country back to an era that ought to belong to the annals of history is now the driving force that will determine our future. God help us!

    Reply
    1. dbtheonly April 29, 2017

      But Dom, many other nations have tax rates significantly below the 35% rate. We’ve seen any number of companies take their headquarters and headquarter jobs overseas. Burger King to Ireland is one example.

      Ease of transportation and money make corporations independent of nations.

      More interesting to me is the elimination of the AMT, which, as Mr. Conason points out, is the only reason Trump’s paid any taxes, as far as we know.

      On the other hand, Trumps’s proved incompetent at everything so far. What makes you think tax overhaul will be any different?

      Reply
      1. Dominick Vila April 29, 2017

        I doubt Trump has paid any taxes in years. It is also important to point out that many American corporations, and wealthy individuals, have been paying little or no taxes for years as a result of all the loopholes that allow them to reduce their tax burden. Sometimes down to nothing.
        Regarding his incompetence, or ignorance, which is evident he seems to have an ability to figure out how to benefit from his position. Whether it is by proposing legislation that benefits people like himself, or simply wrapping himself in the flag to deliver red meat to his naive followers, like he did at the NRA, he knows how to get what is best for him.

        Reply
        1. dbtheonly April 29, 2017

          Well Dom, one man’s loophole is another’s vital deduction. We see it in Magnus’ comment where he decrys deductions, except the solar and renewalable power deductions.

          Reply
        2. Independent1 April 29, 2017

          And Dom, it’s not just corporations; is it any wonder that America is running deficits when according to the IRS for 2015, THE AVERAGE multi-millionaire/billionaire paid 20.4% of his gross income in income tax (no where near 39%). And the average American earning $50,000 to $500,000 paid 8.7% (no where near 25 some percent or so), and the average American earning $50,000 and under paid 4.8% of his gross income (no where near 15%.) And that’s all due to the convoluted tax code you mentioned.

          In reality, Americans are some of the most least taxed people on the planet for people living in an industrialized nation.

          Reply
          1. Dominick Vila April 30, 2017

            Indeed. We also spend more on “defense” than most of the industrialized world combined. Our deficits are caused by insufficient revenues to cover outlays, and Trump is proposing more tax breaks and greater spending on defense!

            Reply
          2. Independent1 April 30, 2017

            Yes, and with respect to that government spending, here’s a chart I got from NationalPriorities.org which I think really brings out just how out of proportion America’s spending on defense really is. (note that Russia spends less on defense than China or Saudi Arabia.)

            https://uploads.disquscdn.com/images/7e553f8fb6ebe5a8a1fe23f001a919c60d62cd7604a88b702e857f7fb4543bea.jpg

            Reply
      2. bobnstuff April 29, 2017

        Not all corporations pay the same rate and in fact few pay the full rate. Many very large companies pay zero in taxes even though they are making large profits. Go a head and drop the rate to 20% or 25% that other countries charge and make all corporations pay the full amount. The same goes for the top 10%. Lower the rate but make everyone pay the same percentage. True taxes reform.

        Reply
        1. greenlantern1 April 29, 2017

          You expect Trump to sign THAT?

          Reply
        2. Magnus Thunderson April 29, 2017

          I agree the corporate tax’s need to go down but that money should come for increased tax’s on those who will benefit massively on it IE the rich and those stockholders so put it on those making over 125k ramping increased tax rate up to the top 1% who will have each the most of the increase but they can afford it they just will not like it

          Reply
          1. bobnstuff April 29, 2017

            The funny thing is the more money you make the lower your real tax rate. If we got even 20% 0f the total income of the top 1% we would see a noticeable increase in revenue. Just like the corporate taxes. Companies like Exxon Mobil pay no taxes even though they make huge profits. Back in the 50’s tax rates were 80% and 90% so companies reinvested to shield the money.

            Reply
          2. Magnus Thunderson April 29, 2017

            corporate tax’s were never that high it was personal tax’s that high and I think that was a bit to high at 90% and they spend the past 70 years manipulating the tax code in there favor but to reduce it they did wonderful almost magical buildings to hold there company’s with brass and marble gave great benefits and wages and went even to the extremes of the Vanderbilt who built a 45 mile high way race track east to west on Long island raced it for a few years and the gave as a massive tax right off to NY state and still is the Vanderbilt parkway to the day a major highway on the island and now they keep the majority of the money nothing like that happens now

            Reply
          3. 788eddie April 29, 2017

            During the Eisenhower administration, the highest federal income tax rates were just over 90%. (one had to earn over two and a half million to hit that rate (and only the income over 2 1/2 million was taxed at that rate). You know what? Our country did very well under Dwight Eisenhower; we even built the Interstate Highway System, and improved our railroads, which helped build America.

            We need that again!

            Reply
          4. dbtheonly May 1, 2017

            But the Democrats ran against “High Taxes” and won the election & cut the rates.

            What is good policy has to balance against what is politically feasible.

            Reply
          5. dpaano May 1, 2017

            And that was a GOOD thing….today, Mnuchin keeps thinking that we need to LOWER tax rates and that will stimulate growth…..in actuality, it’s the other way around. If we RAISE the tax rates for the wealthy, they will need to reinvest the money in growth to shield themselves. Why don’t our supposedly intelligent politicians realize this (except for the fact that most of them are in the 1-2% group)!

            Reply
        3. 788eddie April 29, 2017

          An easy change here would be to tax profits and dividends from stock at the same rate that wage earners pay; currently dividends are taxed at 20%, while many wage earners in the NY Metro area are in the 27-28% tax bracket. Why should stockholders get such a discount? I can’t see any logical reason, and I will admit, I’m one of the ones with considerable dividends earnings.

          Make it fair! Get rid of the discount for dividends earnings! Income is income!

          Reply
          1. bobnstuff April 29, 2017

            Flat tax is one answer. Everyone pays the same on all income no matter where it comes from. 18% would do the job. The only thing non taxed would be money paid out in government checks like social security. You could still do things like earned income credits and pay backs like that but everyone starts by paying taxes.

            Reply
          2. 788eddie April 29, 2017

            Flat tax is one answer, except it tends to hit those one the ower end harder, because they spend a much higher percentage of their income on essentials than those who have more “discretionary income.”

            The very wealthy have enjoyed an economic environment that allowed them to earn (and keep) a lot of their wealth. In other countries, they might even risk confiscation of wealth by capricious governments. I have no problem with those on the upper end contributing a higher percentage for this privilege. This would be referred to as “progressivity” in tax rates , and has been used in out country for decades. Money for the big projects has to come from somewhere, and those who benefit most could pay most.

            As a former prime minister of England once said, “It’s only fair that those with the broadest shoulders carry more of the load.”

            Reply
          3. Magnus Thunderson April 30, 2017

            a single flat tax is a horrible design it as it hurts the poor badly making them more like slave labor as and favors the rich excessively which is why I suggest 100 tiers going from zero to 60%

            Reply
          4. dpaano May 1, 2017

            What gets me is that I’m getting stuck paying taxes on my social security….money that I involuntarily paid into the government so I could live in my senior years! This year, I was stuck with an $8555 tax bill because I continue to work AND get my social security! I’ve put as much into my 401(k) as I can legally to protect some of my social security money, but when I start taking it out….I get taxed again anyway! The whole tax system is a pain in the butt…..it needs serious review by a group that is NOT part of our government! Once you get the politicians involved, the poor and middle class end up with the short end of the stick!

            Reply
          5. johninPCFL April 30, 2017

            Yeah, but corporate dividends are paid from post-income-tax money. The corporation pays income tax on its profits, then sends out the dividend checks. Then, the recipient pays taxes on the dividend money received. Why the double taxation?

            Reply
          6. 788eddie May 1, 2017

            Everything is taxed more than once, if you count it that way: Your paycheck has taxes removed before you get it. Then, when you get home, you go shopping, and you buy things, and pay taxes on your purchases. the stores that make money off your purchases then pay taxes on their profit. Not to mention that the workers in the store also get a paycheck (with the cycle being repeated for them.

            Reply
          7. johninPCFL May 2, 2017

            The point I was making is that dividends are unique in that the same dollar has two federal income tax payments attached to it. The corporation that sold the stock pays income taxes in perpetuity on any dividends paid to the investor, and the investor who purchased the stock pays income taxes in perpetuity on the monies paid to him with respect to his investment.

            Once paid, all the local sales taxes on expenditures and all the state income, sales, and property taxes that are attached to wages are also applied. Wages, however, are deductible business expenses, so no corporate income taxes are paid on them.

            Reply
          8. 788eddie May 2, 2017

            And the point I was trying to make was that income is income, and should be taxed as such. Those who can afford to buy stock (and that includes some average people, as well as the very wealthy) should not be granted a discount when it comes to the taxes owed.

            Reply
          9. dpaano May 1, 2017

            Whatever happened to Trump’s comment that he was agreeable to the wealthy paying MORE taxes, even himself? Apparently, that turned upside down also….much like his flip flops on his other promises!

            Reply
          10. 788eddie May 1, 2017

            Although tiring, we have to keep repeating the phrase, “Donald Trump lies; about everything!” We have to keep repeating this phrase over and over and over until it begins to sink in.

            They repeated lies again and again and eventually people started to believe them.

            We need to “unlearn” the Trumpers.

            Reply
      3. Independent1 April 29, 2017

        Yes, there are countries like Russia with a 20% rate but how many foreign countries do you think have the convoluted tax code of America which allows companies to tax their investments at 15% and then carry forward for years those profits for taxation purposes? A convoluted code that in any given year allows 200 of the Fortune 500 companies, companies who make billions in profits, to actually pay zero in taxes? And even allows many millionaires/billionaires to do the same thing? I don’t believe there’s a one.

        And it’s not Ireland’s low tax rate that entices companies like Apple and others to set up subsidiaries there. It’s a tax law in Ireland that doesn’t allow them to tax the profits earned from outside of Ireland, earned by companies doing business in Ireland but which are not actually officially registered as an Irish business. So when American companies set up subsidiaries in Ireland for the purpose of being a haven for them to run their profits from their operations in America and say France, Italy, Germany, etal, not only are those profits not taxed by America, they’re not taxed by Ireland either. And there are other countries that have similar tax laws; they don’t tax the profits made outside their country by subsidiaries of a company officially registered in another nation.

        Reply
    2. dpaano May 1, 2017

      Mostly, Dom, God help them because they are going to be hurt the worse for Trump’s actions! Unfortunately, they’ve just been blinded to that fact! They won’t realize it until he actually hits them…..I wonder what excuse they’ll come up with to get around it when it DOES hit them……

      Reply
  2. FireBaron April 29, 2017

    It has been joked that Teflon Donnie has appointed the foxes to guard the henhouse. I say no. Foxes are significantly more intelligent and honorable. He has appointed the weasels to the job.

    Reply
    1. Sand_Cat May 1, 2017

      You shouldn’t insult weasels, either. “Scum” or something worse seems to fit.

      Reply
  3. idamag April 29, 2017

    Trump supporters fit into a few categories: Neo nazi hate groups, organized cirme, wealthy who think they should not have to pay taxes, and the ignorant who will pay the taxes for 3 million dollar weekends. The unlearned who are paying for his entire family to grift the government. The unlearned who screamed about the 8 times Obama played golf. Obama had the White House to live in and Camp David for a retreat. The grifter has the White House, Mar-a-Lago and a place in Louisiana that we pay for. He takes three day weekends every week.

    Reply
    1. dpaano May 1, 2017

      I wish I could get away with that……not sure how he does it.

      Reply
  4. greenlantern1 April 29, 2017

    Was it in our national interest, for BIG OIL to drill, at the US NAVAL OIL RESERVE at TEAPOT DOME?

    Reply
  5. Magnus Thunderson April 29, 2017

    what we need to do is throw away the current 1000 plus page tax code
    and set up 100 Tiers from Zero for those under 24k to 60% at the highest tier
    only deductions will be for a home up to a million and children up to 3 and of course solar wind and other clean energy and charity

    Reply
    1. 788eddie April 29, 2017

      When are you running for office, Magnus; you’ve got my vote.

      Reply
      1. Magnus Thunderson April 29, 2017

        sadly I do not nave the money required or I would

        Reply
        1. 788eddie April 29, 2017

          Your comment points up another way our country’s democracy has been damaged, much to the advantage of those who already enjoy the best of everything.

          Reply
          1. Magnus Thunderson April 29, 2017

            sadly your so right and you not the first person who wished I run just not met the right person yet as I would be a statesman not a politician but again that I why I have a hard time winning if I did have the money

            Reply
    2. dpaano May 1, 2017

      That MIGHT be a good plan, but it’ll never get past a conservative Congress!!!

      Reply
      1. Magnus Thunderson May 1, 2017

        So very true they there to in bed with the rich to even think about it

        Reply
  6. dpaano May 1, 2017

    I just don’t understand how Trump’s followers do not understand what’s going on…..how can they NOT see that his tax plan would end up costing them more money and give the wealthy less taxes to pay? How can they not see that his idea of “fixing” Obamacare would end up leaving 20M of them without healthcare totally? Are they that uninformed or that brainwashed that they can’t see what’s being done to them by the Trump administration? If so, then I feel really bad for them because, when they DO finally figure it out, it’ll be too darned late for them! And, in the meantime, it’ll be the rest of us who will also be screwed!

    Reply

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