I've actually read the transcripts as well as several

Quote:

Donald Trump's “new" tax plan: a giveaway to the rich that he pretends helps the middle class

Updated by Dylan Matthews on August 9, 2016, 2:20 p.m. ET @dylanmatt dylan@vox.com

Donald Trump wants you to believe that his tax plan is maturing; that it’s moving away from its original form, in which it would more than double the national debt and give the top 0.1 percent $1.3 million apiece; that it’s more responsible and in particular more targeted toward people at the bottom.

He told the Detroit Economic Club on Monday that the plan was designed to "Make American Great Again for everyone, and especially those who have the very least," and promised that "for many American workers, their tax rate will be zero."

And superficially, he is making changes in that direction. His first tax plan had three brackets: 10, 15, and 25 percent. Now he’s bumped the rates up to 12, 25, and 33 percent, the same ones proposed by House Speaker Paul Ryan. He’s also added a new tax benefit: a deduction for child care costs borne by families.

The problem is that the changes do little to nothing to solve the main problems with Trump’s tax plan. The plan would still cost an enormous amount of money, adding many trillions of dollars to the national debt.

Despite Trump’s promise to close the carried interest loophole for hedge fund managers, the plan would actually expand it. And even after the changes, the plan is still heavily tilted toward helping the rich.

Trump’s tax plan is still exorbitantly expensive

It’s helpful to take a look back at the Tax Policy Center’s initial analysis of the Trump tax plan, back in December, which broke down the plan’s cost by its component parts. As you see, the rate cuts are the most expensive part of the package. But they only account for about 41 percent of the plan’s overall cost:



Tax Policy Center estimates of the cost of Trump's tax plan
Tax Policy Center

TPC’s initial analysis of Trump’s plan.

In the first 10 years, the new income tax rates would cost $3.95 trillion. But Trump’s massive expansion of the standard deduction to $25,000 for singles and $50,000 for couples, a near quadrupling of the current deduction (which is $6,300 for singles and $12,600 for couples), would cost $3.29 trillion.

What’s more, that provision is only going to get more expensive under the new rates. Higher tax rates make deductions more valuable (because you’re avoiding more tax through them), and thus more costly.

Then there’s Trump’s massive decrease in the corporate tax rate, from 35 percent to 15 percent. That’s another $2.4 trillion, plus another $1 trillion on top of that because he applies the new low rate to "pass-through entities," businesses that are currently taxed at individual income tax rates.

The combined $3.4 trillion cost here is also an underestimate, given the latest changes to Trump’s plan. When corporate tax rates are lower than individual ones, that creates an incentive to reclassify individual income as corporate income to pay the lower rates.

And that incentive is bigger when the gap is between a 33 percent top individual rate and a 15 percent corporate rate than when it’s between a 25 percent top individual rate and a 15 percent corporate rate. So Trump hiking the individual rates without hiking the corporate rate leads to some additional lost revenue.

Imagine for a second that Trump didn’t cut individual rates at all but kept every other piece of his plan the same. And forget for a second that this would make the plan itself more expensive, for the reasons explained above. The plan would still cost $5.57 trillion and, excluding interest payments, would increase the national debt by 19.5 percent of GDP.

By contrast, George W. Bush’s famously massive tax increases only boosted the national debt by 11.4 percent. Take into account the rate cuts, the increased cost of other provisions, and interest payments, and Trump’s plan would cost much, much more and even more dramatically dwarf Bush’s.

The Bush tax cuts have rightly gained a reputation as one of the more fiscally irresponsible, least economically necessary policies pursued by any administration in recent memory. Trump promises to increase the national debt by far, far more for an even bigger giveaway to the rich.

And that increased debt eventually has to be paid for somehow. Maybe it gets paid for by future tax increases on the rich, in which case this is all somewhat pointless. If the cuts are to be made permanent, that leaves spending cuts to plug the gap.

Even if you were to cut defense spending as well, there’s just no way to raise that much money without cutting programs for the poor and social insurance programs like Medicare and Social Security. Once you take those cuts into account, the plan becomes extremely regressive for all but upper-income taxpayers.

The plan is still a big giveaway to the rich

Trump’s claim that the plan now offers more to "those who have the very least" also fails to hold up to any scrutiny. For one thing, as the Tax Policy Center’s Elaine Maag explains, the plan to make child care deductible is regressive: It only benefits the middle- and upper-income Americans with a positive income tax liability.

There are some indications that the deduction might apply against payroll taxes, which would help things a bit, but barring that, as Maag concludes, "Trump has identified a real challenge affecting working families, but his proposal would do little or nothing to help them."

The increased individual tax rates also don’t change the essentially regressive nature of Trump’s plan. Going from the current top individual tax rate of 39.6 percent to 33 percent is still a significant cut for high-income individuals, even if it’s a slightly smaller one than he initially proposed.

The corporate tax is overwhelmingly paid by rich corporate shareholders, not workers, meaning the 20-point drop in the corporate rate Trump is proposing would predominantly help the rich.

Same goes for his plan to abolish the estate tax, which is paid by a tiny number of rich families.

Then there’s Trump’s plan to let businesses currently paying individual rates pay the new 15 percent rate. As the Center on Budget and Policy Priorities’ Chye-Ching Huang, Chuck Marr, and Joel Friedman explain, this would create a massive incentive for individuals to reclassify personal wage income as income from business.

In particular, the plan would make it easy for hedge fund managers currently benefiting from the "carried interest" loophole, which lets them pay lower investment tax rates on their earnings, to pay even less than they do now. Given that Trump has explicitly called for an end to the carried interest loophole, that’s galling.

Currently, long-term capital gains are taxed at a maximum rate of 23.8 percent — significantly lower than the top rate on wages, 39.6 percent. So many hedge fund managers arrange their compensation to pay the former, not the latter.

Trump’s plan would make it easy for them to reclassify their compensation as business income, taxed at only 15 percent. Not only would that fail to close the loophole, it would also open a massive new one and save hedge funder still more money.

Then there’s the fact that taxing pass-through income at a lower rate is regressive, even if it didn’t encourage people to reclassify income. About 69 percent of pass-through income goes to the top 1 percent of earners.

And despite the common perception that pass-through businesses are small enterprises, most pass-through income comes from pretty large companies, just ones that have relatively few shareholders.

As CBPP explains, the mere 0.4 percent of all pass-through companies that earn more than $50 million in revenue account for 40 percent of all pass-through corporation income.

Long story short: This is big money, going from very successful businesses to their wealthy shareholders, that Trump is proposing to tax at a much lower rate.

Fundamentally, Trump is still offering voters the same approach to taxes he’s been offering all campaign: massive cuts for corporations of all kinds, big rate cuts for top earners, and benefits supposedly aimed at the middle class that offer less than they initially appear to.