Claims about Trump’s tax plan don’t hold up

Even if the Trump tax plan advances in the House, it still faces some powerful opposition in the Senate.

The plan would slash corporate taxes and almost double the standard deduction for married couples to $24,000. A key element is a one-time tax on overseas profits, which Mnuchin said will “bring back trillions of dollars that are offshore to be invested here in the United States”.

But it’s a bonanza for the well-to-do, including Donald Trump and his family.

Holtz-Eakin says that while he is sympathetic to the Trump Administration’s objective, it is not supported by current economic conditions.

Trump’s plan has the potential to provide big tax cuts to high-income families – unless you live in a state with high state and local taxes. House Minority Leader Nancy Pelosi, D-California, noted Thursday that the proposal would have lopped more than $30 million off Trump’s 2005 income taxes, based on a partial copy of Trump’s tax return for that year that was leaked months ago. There are surely doubters, many of them among the president’s own party in the Congress, who are also waiting to see what this would do to the deficit – at the very least in the short term.

Trump has proposed ending that state and local tax deduction. The top rate for American corporations – nearly 39 percent, including a 35 percent federal rate and a bit more for the average state rate – is among the highest in the world, according to the Tax Foundation. The White House plan would eliminate the estate tax, which mainly affects the top 10 percent of income earners. Trump’s plan would eliminate certain provisions that now work to these groups’ advantage. Wealthy people like Trump can pass on $11 million tax free to their family.

The proposal from President Donald Trump’s administration to cut the tax rate on partnerships and limited liability companies could set off a stampede of individual taxpayers trying to reclassify themselves as so-called pass-through businesses to take advantage of the savings, tax experts say.

For individuals and families, the plan reduces the number of tax brackets (the highest of which is now 39.6 percent) from seven to three, at 10 percent, 25 percent, and 35 percent.

New Yorkers claimed $68 billion in itemized deductions for state and local taxes in 2014, according to an analysis by the conservative Empire Center for Public Policy.

During the campaign, Trump said he would release the returns after an audit was complete, even though the Internal Revenue Service does not prohibit those under audit from releasing that information. Democrats will insist he do this before any tax bill is passed.

Tyler Houlton, director of federal affairs at libertarian-leaning Americans for Prosperity, said the move would spur economic growth.

After President George W. Bush cut taxes in 2001 and 2003, the economy never achieved liftoff, bumping along at an average growth of 2.1 percent annually for eight years.

When the only real tax reform was enacted in 1986, it was revenue-neutral and bipartisan.

Albert Hunt is a Bloomberg View columnist.

Condon reported from NY.