This editorial will be longer than President Donald Trump’s current tax plan. We raise questions the one-page plan doesn’t begin to answer. And, unlike the president, we won’t make promises we can’t keep.
So far, Trump’s tax overhaul, unveiled Wednesday, is flimsy and certainly incomplete. But from what we can tell, the plan seems to be a windfall for the wealthiest Americans, with little evidence that it delivers on Trump’s campaign promises. And it could balloon the federal deficit, leaving generations with a hole that’ll be difficult to escape.
The proposal does take the right approach in attempting to simplify the barnacled process. It would, for instance, reduce the number of income tax brackets from seven to three. But we don’t know the income levels for those brackets, so we have no idea how that would affect individual taxpayers. Wealthy taxpayers would benefit from the elimination of the estate tax and the alternative minimum tax, as well as from reductions in the corporate tax rate to 15 percent, a rate that would also apply to income from partnerships, hedge funds and other “pass-through” arrangements. White House officials claim they would find a way to prevent high-income earners who now pay at a higher individual rate (up to 39.6 percent) from sliding into the 15 percent category. But the door seems to be wide open for those at the top to benefit most.
The president’s plan would double the standard deduction, but get rid of key itemized deductions, including those for state and local taxes, and medical and home office expenses. That could hurt some NYC residents.
Despite pledges to the contrary, there’s no evidence that the massive tax cuts would lead to significant job creation or economic growth, never mind the kind that would cover the revenue loss — up to $7 trillion over the next 10 years.
And while it’s not by itself a reason to dismiss the overhaul, yes, Trump’s plan would certainly benefit Trump, his family and their companies. We don’t know how much because the president won’t release his tax returns. We’re told he has no intention of doing so.
Congress should insist on it — especially before approving any tax overhaul.