I’m a little tired right now, so I hope you’ll all excuse me if I don’t dive too deeply into Donald Trump’s newly-released tax plan right now. Wait. Sorry. It’s not a plan, it’s a “unified framework,” whatever that means. My best guess is that it means “this is a joke.”
Take the section on individual taxes. It clocks in at two pages. With lots of white space. Here’s the whole thing:
- The personal exemption for dependents is eliminated and the standard deduction is doubled.
- Seven brackets are decreased to three. The bottom bracket goes up and the top bracket goes down.
- The framework proposes using a new measure of inflation—presumably chained CPI, though it doesn’t say so. If that’s what it is, it would make bracket creep worse and would steadily raise taxes on the middle class. It might also be a Trojan Horse, providing an excuse to apply it to Social Security as well, which would reduce the growth of Social Security payments. This one is a sleeper. Keep an eye out for what it turns out to be.
- The child tax credit is increased and it phases out more slowly. There’s a small new tax credit for non-child dependents.
- The estate tax and the Alternative Minimum Tax are eliminated, to the delight of millionaires everywhere.
- Itemized deductions are eliminated except for all the ones that matter: mortgage interest, charitable giving, the EITC, retirement accounts, and education accounts. Off the top of my head, I think these account for about 70 percent or more of all itemized deductions.
That. Is. It. The New York Times calls this a “sweeping” change to the tax code, but I can’t figure out why. It looks to me like little more than a garden-variety Republican campaign document, with no detail and no willingness to tackle any of the hard stuff. Like most Republican tax proposals, it appears to be roughly neutral for middle-class families and a boon for the rich—though I’m sure the Tax Policy Center will provide the grim details soon. I can’t figure out why it’s taken Steve Mnuchin eight months to come with it.
I dunno. Maybe the sweeping stuff is in the second section, which proposes changes to corporate taxes. It’s also two pages long, so it shouldn’t take too long to figure out. I’ll take a look later and let you know.