The tax plan Republican presidential nominee Donald Trump unveiled last month would cost $7.2 trillion over the next decade, according to an analysis from a nonpartisan think tank, with most of the benefits flowing to the wealthy.
Trump’s tax plan would eliminate the tax on multimillion-dollar inheritances, cap all business taxes at 15 percent and reduce income taxes across the board. But the Tax Policy Center found the plan to be heavily weighted in favor of the super-rich. The top 1 percent of households would receive an average tax cut of $214,690 in just the first year of the plan’s implementation, while the top 0.1 percent would save a whopping $1.1 million. Middle-income households would receive a tax cut of just $1,010, while the lowest-income taxpayers would get $110. Nearly half of the decline in federal revenues caused by Trump’s tax changes would flow to the top 1 percent, and roughly one-fourth would go to the top 0.1 percent.
Hillary Clinton’s plan, by contrast, would increase federal revenues by about $1.4 trillion, with nearly all of the increases borne by the top 1 percent, and very slim tax breaks for the middle class. Clinton has pledged to use the additional revenue to fund infrastructure projects, universal pre-K, and free tuition at public colleges and universities for every family that makes less than $125,000 ― benefits aimed at working families. Trump’s deficit-ballooning plan would either be financed by more borrowing, spending cuts, or both. Spending cuts disproportionately impact the poor, since most social services aren’t designed to aid the wealthy.
To put the $7.2 trillion price tag for Trump’s tax cuts in perspective: The Bush tax cuts cost about $2.8 trillion over their first decade (elements of them remain in place under deals Obama cut with the GOP Congress). When they were passed, the Congressional Budget Office predicted they would cost about $1.65 trillion.
Trump would slash tax rates for the biggest corporations from 35 percent to 15 percent, and allow small businesses to qualify for a 15 percent tax rate as well. But Trump’s small business perk functions as a major boon to many wealthy filers. That’s because he makes all pass-through corporations ― entities often set up to handle specialty income like book royalties, or to process the earnings for doctors, lawyers, hedge fund managers and other professionals ― eligible for his small business tax cut. The Tax Policy Center concluded this tax break alone will cost $895 billion.
Trump’s plan would increase the national debt as a percentage of the total economy by 26 percent in the first decade, and over 50 percent by 2036.
Editor’s note: Donald Trump regularly incites political violence and is a serial liar, rampant xenophobe, racist, misogynist and birther who has repeatedly pledged to ban all Muslims — 1.6 billion members of an entire religion — from entering the U.S.