Trump's tax plan won't deliver what he promises

Saturday , October 07, 2017 - 4:30 AM1 comment


President Ronald Reagan, who honed his speaking skills as a Hollywood actor, knew how to make a good speech. But perhaps his most memorable line, spoken during a 1980 debate with the incumbent president, Jimmy Carter, was: "There he goes again."

Those four words came to mind as President Trump trotted out the framework of his promised tax reform plan, which is supposed to boost the middle class. There he goes again, Mr. Trump, trying to put lipstick on a pig of a proposal that in its present form won’t deliver what he promises.

Boiled down to its essence, this is just another iteration of the trickle-down theory, or "Reaganomics," that the Gipper insisted would boost the economy 30 years ago. It didn't work then, and it won't work now. Trump proposes giving huge tax cuts to corporations, which he says will use the money saved to create jobs. But the theory always fails because corporations put profits before job creation every time.

"My plan is for working people and my plan is for jobs. I don't benefit. Very, very strongly I think there's little benefit for people of wealth," Trump insisted. And he said it with a straight face. A businessman as astute as Trump professes himself to be could not have missed the nuggets in his tax plan that will make the rich richer.

An analysis for Fortune magazine by Seth Hanlon of the liberal Center for American Progress details exactly how Trump's plan would benefit the wealthy. The plan would create a new preferential tax rate for so-called pass-through businesses, including limited liability companies (LLCs), partnerships, and S-corporations, which are privately held corporations that choose to be taxed as partnerships ...

As disingenuous as Trump is being about his tax plan favoring the wealthy, it is more disturbing that the document doesn't include how he is going to replace the $2.2 trillion in revenue lost through his tax cuts. In addition to ending the AMT and reducing the number of tax rates from seven to three, he wants to cut the corporate tax rate, double the standard deduction for individuals and couples, and repeal the estate tax.

Republicans in Congress are desperate for a win after failing to kill Obamacare as they promised. But a more realistic tax plan than Trump's proposal must be negotiated if the goal is to both help the middle class and pay this country's bills.

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