Monday, August 1, 2016

Donald Trump - The Tax Hiker?

Updated March 2017

When looking at politicians and their platforms, I always like to look back in time at comments that they made in the past about key issues, particularly taxation and the federal budget/deficit/debt.  In the case of Donald Trump, his tax record as a politician is very short, however, I did manage to find some interesting comments that he made on taxes back in 1999 when he was taking a run at the leadership of the Reform Party which was founded by Ross Perot in 1995.  At the time, Mr. Trump was running for the party's leadership against well-known conservative and ex-Republican, Pat Buchanan, however, he dropped out of the race on February 14, 2000 when Ross Perot endorsed Pat Buchanan.  Interestingly, at the time, Donald Trump stated that talk show host, Oprah Winfrey, would be his ideal running mate.

As you may or may not be aware, Donald Trump is a relatively recent convert to Republicanism.  Over the past three decades, he has switched political allegiances several times as you can see in this posting.  In October 1999, his voter registration card showed this:

The Independence Party was the state of New York's version of the Reform Party.

By August 2001, this is what his voter registration card showed:

In that nearly two year period, Donald Trump released his tax plan that would pay off the federal debt which stood at a rather measly (by comparison to today's $19.402 trillion!) $5.66 trillion.  His plan was rather unique given that it would massively increase taxes on a tiny fraction of Americans; the dreaded "one percent".  Trump's plan would have seen a one time "net worth tax" imposed on the wealthiest of Americans who, according to Mr. Trump, controlled 90 percent of the wealth in the United States.  This one time tax of 14.25 percent would have been imposed on the total net worth of the top one percent of wealthy Americans and trusts which he defined as those that had a value of more than $10 million.  The 14.25 percent tax would have been levied on a one-time basis and would have been payable over a ten-year period.  Mr. Trump's calculations estimated that the tax would pay off the entire $5.66 trillion debt, resulting in an annual interest on the debt savings of $200 billion which could be used to reduce taxes for middle class Americans.  Mr. Trump also noted that the one-time tax would allow the federal government to end the estate and inheritance taxes and would save the Social Security system from its future underfunding woes.   

In sharp contrast, when we flip to the 2016 version of Donald Trump, we find quite a change.  A study of Donald Trump's election campaign tax plan by the Urban-Brookings Tax Policy Center found the following:

The revenue loss during the second decade between 2027 and 2036 would reach $15 trillion.  Including interest costs, the Trump proposal would add $11.2 trillion to the national debt by 2026 and $34.1 trillion by 2036.  Even more frightening, if the tax cuts were not offset by cuts in spending, the national debt would rise by 39 percent of GDP in 2026 and 80 percent of GDP by 2036.

Another analysis of the 2016 version of the Trump tax plan by Citizens for Tax Justice shows the following:

While lower and middle income Americans would benefit from the election campaign iteration of the Trump tax plan, in fact, the biggest beneficiaries by a wide margin are the wealthiest who walk among us, the group that Mr. Trump planned to attack back in 1999.


1 comment:

  1. The Trumpster is a wild card I don't think anyone really knows what he would really do once in office.