Trump's tax plans

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Lower-than-expected tax receipts seem to be in part a problem of Trump's own making. Trump's promise to cut taxes and recent rollout of a one-page tax outline seems to be causing Americans to delay some of their tax bill in anticipation of the lower rates. A report from the Congressional Budget Office on May 5 said tax receipts between October and April were 3% below the office's projections from January. The CBO said that could be in part due to Trump's tax promise.

Debt ceiling: How will Trump deal with it? - Business Insider

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Some of the Trump campaign's economic advisers are the president's fiercest public defenders. Some got jobs. Others just don't want to talk about it. Donald Trump named two batches of names to his economic advisory council during the election -- the first included five guys named Steve and no women, and the second several women and Anthony Scaramucci. A number of those advisers went on to serve in the presidential transition team and in the Trump administration, while others have gone radio silent on Trump.

And many continue to sing his praises. "He's got things moving in the right direction," said Dan DiMicco, the former CEO of Charlotte-based steel company Nucor (NUE) who was brought on in the first batch of advisers. "He's making a lot of headway, but he can only do so much, and the Congress needs to support it." DiMicco, whose expertise lies in trade, was part of Trump's presidential transition team and was reportedly bypassed for the job of U.S. Trade Representative, which went to former Reagan official Robert Lighthizer instead. Lighthizer is helming trade policy alongside Peter Navarro, another campaign adviser, and Commerce Secretary Wilbur Ross. Of being passed up for the USTR job, DiMicco remarked, "that's what the papers said," without commenting further. On the prospect of another job in the Trump administration now, he says he'd rather take a pass. "My position with that is I have been offered several opportunities, none of which I was willing to move to Washington, D.C. for," he said.

The same goes for Judy Shelton, director of the Sound Money Project at Atlas Network. The conservative economist and proponent of returning to the gold standard says she was drawn to sign on as an adviser to Trump because of his comments on exchange rates and currency manipulation. She served on the transition team for the Treasury Department but ultimately didn't take an administration job.

A Host of Economic Advisers Still Back Trump, but Acknowledge His Shortcomings - TheStreet

Gold bugs and protectionists, not quite an A-list of economists..

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LOL, what was once (in true Brave New World fashion) trumped as a big tax cut for the middle class is now, well, read for yourself..

The White House is “absolutely committed” to getting its tax overhaul proposal through Congress by the end of the year -- and that plan won’t include a 40 percent tax rate for the richest Americans, Treasury Secretary Steven Mnuchin said. “Our plan is to have a full-blown release of the plan in the beginning of September, with being able to vote and getting this passed before the end of the year,” Mnuchin said on ABC’s “This Week” on Sunday. The “objective” of the proposal is still that no one in the middle class will have a tax increase, Mnuchin said. “We’re finalizing the details of the plan, so there’s certain issues that are still on the table.”

Mnuchin Dismisses Idea of 40 Percent Top Tax Rate for the Rich - Bloomberg

And it's only the 'objective'.. no guarantees here..

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That reverse Robin Hood tax plan busting the budget as well:

A new analysis by the Tax Policy Center finds that the tax cuts included in the Trump administration’s outline for tax reform released in April could cut federal revenues by as much as $7.8 trillion over 10 years, and that the benefits would go almost exclusively to the top 5 percent of earners.

Even if the plan included some very large tax hikes to offset the cuts (like doing away with personal exemptions and other common deductions) and taking into account effect on economic growth, the cost still comes to $3.4 trillion over 10 years. The cost would be even greater once you take into account the interest the US would have to pay on all that debt. For context, a $3.4 trillion tax cut would amount to about 12 percent of GDP in 2027, slightly larger than all the tax cuts George W. Bush passed while in office.

The package, the TPC finds, would overwhelmingly help the wealthy. Including the tax hikes, the overall plan would give the average family earning under $25,000 per year a $40 tax cut, or a 0.3 percent boost in after-tax income. The top 0.1 percent, earning above $3.4 million a year, would get an average tax cut of $937,700, or a 13.3 percent boost in after-tax income:

Trump’s tax cuts would give the poor $40 each and the ultrarich $940,000 - Vox

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The tax cuts (mostly for the rich) are so large making huge cuts in spending that supports low and middle income households..

We don't know a lot of details about President Trump's tax plan, but we do know it's expensive, in terms of lost revenue for the federal government. Paying for it could very well mean cutting programs that Americans rely on, leaving most of the country worse off than before the tax cuts.

The independent, nonpartisan Tax Policy Center estimated last month that the cuts Trump has proposed — including slashing the corporate tax rate from 35 to 15 percent, getting rid of the estate tax, and cutting the top rate for individuals from 39.6 percent to 35 percent — would cost as much as $7.8 trillion over 10 years. And they’re overwhelmingly targeted at rich Americans and corporations.

Trump’s team has given little sense of how they might raise other revenues to offset that cost. That ambiguity poses big problems. Not paying for the cuts at all would increase the US debt-to-GDP ratio by about a third or more come 2027. Bills that increase the long-run deficit are impossible to pass through budget reconciliation with a simple Senate majority, so this option would almost certainly doom the tax bill in the Senate.

Republicans could change other tax provisions to fund the rate cuts, but the Tax Policy Center estimated a few options that the Trump team has hinted they might include, like eliminating all tax deductions except on charitable giving and mortgage interest, and found that including them only brings the total cost of the tax cuts down to $3.5 trillion.

That leaves spending cuts as the last viable option to fund the tax plan — an option favored by conservatives in the House, at least. There’s a problem with that plan, though, which the TPC highlights in a new study: Those spending cuts could result in the overall tax plan hurting the vast majority of Americans, to benefit the rich. The cuts, as it is, don’t do much for anyone but the rich, but on their own they don’t hurt the middle class. If they’re funded by spending cuts, they will.

How Trump’s tax cuts could wind up hurting most Americans - Vox

And the Trump budget proposal already contains brutal cuts.

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Representing the White House in the so-called Big Six writing President Donald Trump's tax plan are Goldman Sachs vets Gary Cohn and Steve Mnuchin. And while details about the plan are hard to come by, both men have dropped hints over the past few weeks about their contributions to its shape. Based on their hints, it sounds like their Goldman friends — and Wall Street in general — will be rather pleased with how it all shakes out.

White House tax plan has gifts for Wall Street, Goldman Sachs guys hint - Business Insider

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Tax lobbyists and Wall Street rate the prospects of tax reform as very low. One veteran tax lobbyist, a former member of the Senate Finance Committee staff, said the chances of a broad tax reform package similar to the 1986 rewrite of the code are “zero.” Another K Street tax specialist put the odds at “less than one in four,” citing the lack of a detailed plan from the administration and the cluttered agenda.

Pessimism abounds on Trump tax reform effort | TheHill

During a Friday morning interview on Fox Business, President Trump’s top economic official suggested the Republican tax plan won’t involve a cut for top earners, but immediately walked it back when he was pressed on the point. Host Stuart Varney began his interview with Gary Cohn by saying, “President Trump talks of a middle-class tax cut… Does that mean that the top 1 percent won’t get a cut in their taxes?” “That is what the president’s talking about,” Cohn replied. “What the president spent his time on, and what we’ve been working on here in the White House, is a middle-class tax cut.” Seconds later, Varney pressed the point, asking Cohn, “Well, does that mean that there will be no cut in the top rate of income tax for individuals?” Suddenly, Cohn wasn’t so sure anymore. “Stuart, there may be a cut,” he said. “But remember, it’s the effective rate.” Flip-flopping about whether the top one percent will get a cut under the Republican tax plan has been a feature, not a bug, of the Trump administration’s messaging.

Trump’s economic adviser suggests Trump won’t cut taxes for top 1 percent, immediately walks it back – ThinkProgress

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“They’re nowhere. They’re just nowhere,” said Henrietta Treyz, a tax analyst with Veda Partners and former Senate tax staffer. “I see them putting these ideas out as though they’re making progress, but they are the same regurgitated ideas we’ve been talking about for 20 years that have never gotten past the white-paper stage.”

Trump’s Pivot to Taxes Is Fraught With ‘Pitfalls Everywhere’ - Bloomberg

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This will be the day..

This week alone, Trump discussed tax reform with Democratic lawmakers at a trio of meetings. Following one with a bipartisan group of congressmen, Trump told reporters that "the rich will not be gaining at all with this plan" and that he thinks "the wealthy will be pretty much where they are." "If we can do that, we'd like it. If they have to go higher, they'll go higher, frankly," Trump said. "We're looking at the middle class and we're looking at jobs."... 

Mnuchin said the only wealthy Americans who would not see such a break are those living in California and New York, which is a result of the deductions for state and local taxes being eliminated as a part of the GOP plan.

Trump courts Democrats as Republicans ready tax reform - Business Insider

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Good read about 5 myths of the Trump tax proposals, especially no.3:

Myth #3: Small businesses are being taxed unfairly.
Many business owners set up their companies using “pass-through” structures such as LLCs. Under this part of the tax code, profits are taxed as individual, instead of corporate, income. Trump runs about 500 pass-through companies, according to his lawyers. Trump has proposed cutting the top tax rate for pass-through income from 39.6 percent to 15 percent, while House Republicans favor a 25 percent rate for what they call “small business income.” That shift could encourage top-earners to seek huge tax cuts by structuring their salaries as pass-through income. 

   

But just as with individual workers, few owners of pass-through companies make enough to be subject to the top rate, which kicks in after a couple makes more than $466,000. As a result, CBPP found that more than two-thirds of the benefits from a Republican pass-through cut would go to millionaires. Only two percent of households that makes less than $100,000 per year would benefit.