Tuesday, September 29, 2015

Daily Trumpeter: Trump's economic embrace of Bush and Rubio - now wants to cut taxes for the wealthy

Trump has finally shed the last vestiges of the populism, the outsider-ism that has made him so popular with rank-and-file Republicans. He is now squarely mainstream by a tax policy mainly benefitting the wealthy.

CNN reports.

Donald Trump is vowing to drastically cut income taxes for millions of Americans across the wealth spectrum while casting aside loopholes popular on Wall Street.

"It will provide major tax relief for middle income and for most other Americans. There will be a major tax reduction," Trump said Monday at a press conference at Trump Tower in New York as he unveiled his plan to revamp the tax code. "It'll simplify the tax code, it'll grow the American economy at a level that it hasn't seen for decades."

One of the biggest beneficiaries appears to be families that draw the smallest paychecks. Individuals that make less than $25,000 (and $50,000 for married couples) would pay no income taxes under Trump's plan.

But many of those families already pay no federal taxes. Roughly 45% of American households will not owe any federal income taxes this year under the existing tax code, according to Tax Policy Center estimates. Trump said his plan will ensure a slightly larger share -- more than 50% of households -- pay no federal income tax.

So there is little in Trump's plan for those families struggling to get by. It's a different story for those families who are relatively well off.

Meanwhile, the proposal would also be a boon for the wealthiest Americans like Trump -- the top bracket includes individuals making $150,001 and more and couples making $300,001 and more -- who would pay an income tax rate of 25%. That's a dramatic cut from the current top rate of close to 40%.

The old Trump sucked in votes by complaining about the low taxes paid by the wealthy. But the new Trump is blaring a different story.

The tax cuts for top earners could open Trump up to charges of hypocrisy. The real estate magnate has surged to the top of the polls by touting a populist tone, lamenting that wealthy people like himself should pay more.

Asked at Monday's press conference how his proposal would affect his own tax rate, Trump dodged the question, saying: "We're reducing taxes, but believe me, there will be people in the very upper echelon that won't be thrilled with this."

He also declined to say how much taxes he currently pays, only saying, "I fight like hell to pay as little as possible."

Economists don't think much of the plan.

Roberton Williams, a senior fellow at the Tax Policy Center, said Trump's claim that his plan would be revenue neutral was "hard to swallow."

Trump's GOP rivals, including Bush and Florida Sen. Marco Rubio, have clear objectives for their tax plan. But Trump's is harder to parse, said Republican economist Douglas Holtz-Eakin.

As for Trump, "I don't know what he wants," Holtz-Eakin said. "It looks like bits and pieces of other people's plans strung together."

A while back I predicted something like this would happen. I saw a strategy emerging in which Trump's bombast appealed to the Radical right-wingers while his policy statements would evolve into mainstream Republican positions.

His public remarks have not cooled off at all, so Trump still comes off as a renegade outsider, a truer conservative than those Republican candidates holding (or having held) public offices. But his policy releases so far suggest that he's endorsing positions held by most Republicans - little gun control and securing our border to name two. As a result, he attracts the hard-core right-wing-nuts but also attracts (or at least does not repel) the establishment base. (Now his effect on the GOP's establishment leaders is another story.) Stay tuned for policy number 3 as a test case.

Well, number 3 has arrived in the form of the tax policy on Trump's web site that favors the wealthy, a long-standing Republican tradition also advocated by other Republican candidates.

Prediction confirmed.

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