Donald Trump on Tax Reform
2016 Republican incumbent President; 2000 Reform Primary Challenger for President
TRUMP: We have to make our country successful, as it was prior to the plague. Now we're rebuilding it and we're doing record numbers, 11.4 million jobs in a short period of time. We had the best Black unemployment numbers in the history of our country. Hispanic, women, Asian, people with diplomas, with no diplomas, MIT graduates; number one in the class, everybody had the best numbers. And you know what? The other side wanted to get together. They wanted to unify. Success is going to bring us together. I'm cutting taxes, and he wants to raise everybody's taxes and he wants to put new regulations on everything. He will kill it. If he gets in, you will have a Depression.
BIDEN: I represent all of you, whether you voted for me or against me. We're going to choose science over fiction. We're going to choose hope over fear. What is on the ballot is the character of this country. Decency, honor, respect.
[OnTheIssues fact-check: Is that true? No]: Kiplinger.com analysis (9/18/20) of Biden's tax plan: He wants to raise the highest personal income rate back up to 39.6% (it was lowered to 37% by the 2017 tax reform law), cap itemized deductions for wealthier Americans, limit "like-kind exchanges" by real estate investors, and phase-out the 20% deduction for qualified business income for upper-income taxpayers. He won't raise taxes for anyone making less than $400,000, though.
To lower tax rates for hardworking Americans, we nearly doubled the standard deduction for everyone. Now, the first $24,000 earned by a married couple is completely tax-free. We also doubled the child tax credit.
A typical family of four making $75,000 will see their tax bill reduced by $2,000--slashing their tax bill in half.
This April will be the last time you ever file under the old broken system--and millions of Americans will have more take-home pay starting next month.
Trump has long attacked the 1986 Tax Reform Act as a disaster. The Act eliminated tax advantages for real estate, and Trump naturally equated the loss of special treatment for his own industry with harm for the economy as a whole. "This tax act was just an absolute catastrophe for the country," he told Congress in 1991. Eight years later, still fuming that Senator Bill Bradley (D-NJ)--a co-sponsor of the law--was running for president, Trump called it "one of the worst ideas in recent history."
One might wonder why Trump reversed himself. The answer is, he really hasn't. Republicans have used the aura of the 1986 Tax Reform Act to promote their tax-cut plans. But what they have in mind now is quite different. The 1986 Tax Reform Act was a bipartisan law, which did not reduce revenue to the government, and actually increased the effective tax rate paid by the rich by eliminating special treatment for capital gains and other tax breaks for the rich. Some Democrats have offered to support legislation along those lines, but the Republican leadership has outright refused.
It's not clear whether Trump realizes the law he praised at length [this week] is the same one he previously accused of destroying the American economy.
Trump isn't alone in his stubborn belief in trickle-down economics. Senate Majority Leader Mitch McConnell has said pretty much the same thing, and Speaker of the House Paul Ryan has also chimed in, calling tax cuts for rich people the `secret sauce" that will help poor and middle class families. Evidently, all the current Republican leaders were issued the same songbook.
The "carried-interest tax loophole" allows managers of investment funds to treat the bulk of their earnings as long-term capital gains instead of income. The current tax rate on capital gains for higher-income tax brackets is 20%. The ordinary tax rate for the same ultra-wealthy class is 39.6%. This tax break benefits only about 2,000 people in the country. The Congressional Budget Office estimates that taxing carried interest at ordinary rates would net $18 billion over 10 years. ["Capital and Main," by Judith Lewis Mernit, June 21, 2016]
In plain English, yes, Trump is proposing getting rid of a tax loophole that would raise taxes on a few wealthy people, and lower taxes by $18 billion overall (if the revenue were distributed in a way that benefited other taxpayers).
Trump: One thing I'd do is get rid of carried interest. One of the greatest provisions for people like me, to be honest with you, I give up a lot when I run, because I knock out the tax code. Clinton could have done this years ago, by the way. She was a US senator.
Clinton: When I was a senator, I did vote to close corporate loopholes. I voted to close one of the loopholes he took advantage of when he claimed a billion-dollar loss that enabled him to avoid paying taxes.
Trump: We have corporations leaving--massive corporations and little ones, little ones can't form. We're getting rid of regulations which go hand in hand with the lowering of the taxes. We're bringing the [corporate] tax rate down from 35% to 15%. We're cutting taxes for the middle class. We are cutting them big league for the middle class. Clinton is raising your taxes and I'm lowering your taxes.
A: I'm really calling for major jobs, because the wealthy are going create tremendous jobs. They're going to expand their companies. I'm getting rid of the carried interest provision. And if you really look, it's not a tax. It's really not a great thing for the wealthy. It's a great thing for the middle class. It's a great thing for companies to expand. And when these people are going to put billions and billions of dollars into companies, and when they're going to bring $2.5 trillion back from overseas, where they can't bring the money back, because politicians like Secretary Clinton won't allow them to bring the money back, because the taxes are so onerous, and the bureaucratic red tape is so bad. It's probably $5 trillion that we can't bring into our country. With a little leadership, you'd get it in here very quickly, and it could be put to use on the inner cities and lots of other things, and it would be beautiful.
TRUMP: Right. Dynamic.
Q: I talked to economic advisors of both parties. They said that you can't cutting taxes that much without increasing the deficit.
TRUMP: Then you have to get rid of Larry Kudlow, who sits on your panel, who the other day said, "I love Trump's tax plan."
BUSH: The Tax Foundation looked at all of our plans, and his creates, even with the dynamic effect, $8 trillion [in deficit].
TRUMP: I'd like to see major tax cuts.
Q: For what the Republicans are talking about--$800 billion or so--would you go that far?
TRUMP: Along the lines of that number, yes, approximately at that number, and could even be more.
TRUMP: The estate tax is a horrible weapon that has destroyed many families. In particular, farms and things where they make an income and they have a certain value and they have to go out and borrow money and they put mortgages on their farm. Let's say it's a business that's not very liquid, and people have to go out and borrow against the business, you are having travesty. And the other thing is, it's a double taxation. The tax has already been paid. I mean you've been hearing this argument for many years.
TRUMP: It will cost me a lot of money. I have carried interest, like a lot of other people do, and carried interest is a wonderful thing, but it's unfair.
Q: But that's $20 billion over 10 years for everyone who has it. That's a small--
TRUMP: But it's psychologically so important. If the economy grows, we all make it up. I mean, frankly, the job producers make it up.
The ad, called `Politician,` begins by showing images of Democratic presidential candidates Bernie Sanders and Hillary Clinton and asks which presidential candidate supports higher taxes. `It's Donald Trump,` the narrator says.
Asked for backup, the Club for Growth referred us to a Feb. 15, 2000, article in The Advocate in which Trump states, `My plan to impose a onetime net worth tax of 14.25% on the super-wealthy, when combined with our current projected surpluses, will raise enough to pay off the national debt.` But Trump isn't advocating anything like that in 2015.
CARSON: The people who [oppose flat taxes]--that's called socialism.
Q: What about the FairTax?
TRUMP: What I don't like about the FairTax is that if you make $200 million a year, you pay 10%, you're paying very little relatively to somebody that's making $50,000 a year, and has to hire H&R Block because the middle class. The hedge fund guys won't like me as much as they like me right now. I know them all, but they'll pay more. I know people that are making a tremendous amount of money and paying virtually no tax, and I think it's unfair.
What does that tell you? It tells me that it's time we restore simplicity & sanity to the income tax. Here's my income tax plan:
Our country is hungry for real tax reform. That's why we should implement the 1-5-10-15 income tax plan. And we need to enact [the rest of] my 5-part tax policy: kill the death tax; lower the tax on capital gains & dividends; eliminate corporate taxes; and a 20% import tax.
As with most things, President Reagan had it right, But Reagan was merely echoing the economic thoughts of President John F. Kennedy, who had already said, in 1962, "The paradoxical truth is that the tax rates are too high today and tax revenues are too low and the soundest way to raise revenues in the long run is to cut rates now."
Reagan and Kennedy's views prove that smart tax policy shouldn't be a partisan issue. It should be common sense. If you tax something you get less of it. It's as simple as that. The more you tax work, the less people are willing to work. The more you tax investments, the fewer investments you'll get. This isn't rocket science.
TRUMP: I'm very underlevered. I have a very, very small percentage of debt compared. In fact, some of it, I did as favors to institutions that wanted to loan me money. $400 million compared to the assets that I have, all of these great properties all over the world, and frankly, The Bank of America building in San Francisco.
Q: Are you confirming that you do owe some $400 million?
Q: Will you release your tax returns so we can see that?
TRUMP: It turned out that I am under audit. No person in their right mind would release, prior to working out the deal with the IRS.
Q: There is no law or rule that prohibits you from releasing your tax returns.
TRUMP: No, except common sense, and intelligence. I would love to release them, and as soon as we come to a conclusion, I will release them, and very gladly.
TRUMP: I paid millions of dollars in taxes, millions of dollars of income tax. And let me just tell you, there was a story in one of the papers that paid-
BIDEN: Show us your tax returns.
TRUMP: I paid $38 million one year, I paid $27 million one year.
BIDEN: Show us your tax returns.
TRUMP: You'll see it as soon as it's finished [referring to an ongoing IRS audit, which Trump has claimed as a reason to not release his tax returns]; you'll see it.
This was not true, by the way. As the business columnist James B. Stewart wrote at the time, "The proposals seem almost tailor-made to enrich the president and people like him." Money magazine characterized the bill as likely to produce a "monetary windfall" for the president. Estimates of the size of the windfall, which run into the tens of millions of dollars annually, are imprecise because the president never released his tax returns.
PENCE: [Trump] is going to release his tax returns when the audit is over.
KAINE: Richard Nixon released tax returns when he was under audit.
FACTCHECK: When asked about Trump's assertion, the IRS said in a statement, "Nothing prevents individuals from sharing their own tax information." But while tax law does not prevent Trump from releasing his returns, waiting until his audit is completed may be beneficial, experts said.
FactCheck by Rocky Mengle in Kiplinger newsletter, Feb. 3, 2021: He wants to raise the highest personal income rate back up to 39.6% (it was lowered to 37% by the 2017 tax reform law), cap itemized deductions for wealthier Americans, limit "like-kind exchanges" by real estate investors, and phase-out the 20% deduction for qualified business income for upper-income taxpayers. He won't raise taxes for anyone making less than $400,000, though. As a candidate, Biden's tax policy proposals also included eliminating the step-up in basis for inherited capital assets, which means more taxes on wealth passed to heirs, and ending favorable tax rates on capital gains for anyone making over $1 million. Also look for the federal estate tax exemption to be increased back to pre-tax reform levels.
TRUMP: Well, the thinking is we have the highest tax rate in the world. We have $2.5 trillion overseas that isn't coming back into this country. So what I'm doing is large tax cuts, especially for the middle class. We're going to have a dynamic economy.
Q: But there are two concerns. The Conservative Tax Foundation, says that over 10 years, you would add $10 trillion to the deficit. And there's also the question of who would benefit under your tax plan. The Foundation says the middle class would see after tax income increase 7.2%. The top 1% would see a spike of 21.6%. So between that and ending the estate tax, the Trump family and folks like you would make out great.
TRUMP: The estate tax has been a disaster; it's double taxation.
But Trump isn't advocating anything like that in 2015. On Aug. 18, Trump said he would not propose changes that increase the net amount of taxes. But he also stopped short of agreeing to sign the Americans for Tax Reform pledge against raising taxes because `I may want to switch taxes around.`
In an Aug. 26 interview, the host noted that `carried interest` would affect not only hedge fund managers, but also people in limited real estate partnerships like Trump, asking `So you are proposing you'd like to raise taxes on yourself?`
`That's right. I'm OK with it,` Trump said. `You've seen my statements, I do very well, I don't mind paying some taxes. The middle class is getting clobbered in this country. I know people in hedge funds, they pay almost nothing and it's ridiculous, OK?` Some interpreted those remarks as Trump agreeing to raise taxes on the wealthy.
In 2011, Trump outlined a plan to end corporate taxes and significantly reduce individual taxes with a five-tier income tax system. In his proposal, the lowest earners would pay a 1% income tax and Americans earning more than $1 million would pay 15%. Trump proposed a one-time 14.25% tax on America's wealthiest residents in order to pay down the national debt.
Ten years earlier, when Trump was also floating a run for the White House, he was singing a different tune. The first proposal unveiled by his exploratory presidential campaign in 2000 was to impose a one-time 14.25% tax on the assets of people and trusts worth $10 million or more.
My proposal would also allow us to entirely repeal the 55% federal inheritance tax. The inheritance tax is a particularly lousy tax because it can often be a double tax. If you put the money into trust for your children, you pay the inheritance tax upon your death. When the trust matures and your children go to use it, they’re taxed again. It’s the worst.
Some will say that my plan is unfair to the extremely wealthy. I say it is only reasonable to shift the burden to those most able to pay. The wealthy actually would not suffer severe repercussions. The 14.25% net-worth tax would be offset by repeal of the 55% inheritance-tax liability.
The Christian Coalition Voter Guide inferred whether candidates agree or disagree with the statement, 'Increase Federal Income Taxes or Income Tax Rates' The Christian Coalition notes, "You can help make sure that voters have the facts BEFORE they cast their votes. We have surveyed candidates in the most competitive congressional races on the issues that are important to conservatives."
The Christian Coalition Voter Guide inferred whether candidates agree or disagree with the statement, 'Permanent Elimination of the "Death Tax"' The Christian Coalition notes, "You can help make sure that voters have the facts BEFORE they cast their votes. We have surveyed candidates in the most competitive congressional races on the issues that are important to conservatives."
|Other candidates on Tax Reform:
|Donald Trump on other issues:
2020 Presidential Candidates:
Pres.Donald Trump (R-NY)
V.P.Mike Pence (R-IN)
V.P.Joe Biden (D-DE)
Sen.Kamala Harris (D-CA)
CEO Don Blankenship (Constitution-WV)
CEO Rocky De La Fuente (R-CA)
Howie Hawkins (Green-NY)
Jo Jorgensen (Libertarian-IL)
Gloria La Riva (Socialist-CA)
Kanye West (Birthday-CA)
2020 GOP and Independent primary candidates:
Rep.Justin Amash (Libertarian-MI)
Gov.Lincoln Chafee (Libertarian-RI)
Gov.Larry Hogan (R-MD)
Zoltan Istvan (Libertarian-CA)
Gov.John Kasich (R-OH)
Gov.Mark Sanford (R-SC)
Ian Schlackman (Green-MD)
CEO Howard Schultz (Independent-WA)
Gov.Jesse Ventura (Green-MN)
V.C.Arvin Vohra (Libertarian-MD)
Rep.Joe Walsh (R-IL)
Gov.Bill Weld (Libertarian-NY,R-MA)
2020 Democratic Veepstakes Candidates:
State Rep.Stacey Abrams (D-GA)
Mayor Keisha Lance Bottoms (D-GA)
Rep.Val Demings (D-FL)
Sen.Amy Klobuchar (D-MN)
Sen.Kirsten Gillibrand (D-NY)
Sen.Maggie Hassan (D-NH)
Gov.Michelle Lujan-Grisham (D-NM)
Sen.Catherine Masto (D-NV)
Gov.Gina Raimondo (D-RI)
Amb.Susan Rice (D-ME)
Sen.Jeanne Shaheen (D-NH)
Sen.Elizabeth Warren (D-MA)
Gov.Gretchen Whitmer (D-MI)
A.G.Sally Yates (D-GA)
External Links about Donald Trump:
2020 Withdrawn Democratic Candidates:
Sen.Michael Bennet (D-CO)
Mayor Mike Bloomberg (I-NYC)
Sen.Cory Booker (D-NJ)
Gov.Steve Bullock (D-MT)
Mayor Pete Buttigieg (D-IN)
Secy.Julian Castro (D-TX)
Mayor Bill de Blasio (D-NYC)
Rep.John Delaney (D-MD)
Rep.Tulsi Gabbard (D-HI)
Sen.Mike Gravel (D-AK)
Gov.John Hickenlooper (D-CO)
Gov.Jay Inslee (D-WA)
Mayor Wayne Messam (D-FL)
Rep.Seth Moulton (D-MA)
Rep.Beto O`Rourke (D-TX)
Gov.Deval Patrick (D-MA)
Rep.Tim Ryan (D-CA)
Sen.Bernie Sanders (I-VT)
Adm.Joe Sestak (D-PA)
CEO Tom Steyer (D-CA)
Rep.Eric Swalwell (D-CA)
Marianne Williamson (D-CA)
CEO Andrew Yang (D-NY)