The Jury Talks Back

9/28/2017

New York Times Hit Piece: Trump Would Save Over $1 Billion Under New Tax Plan

Filed under: Uncategorized — Patterico @ 9:46 pm

New York Times:

President Trump could cut his tax bills by more than $1.1 billion, including saving tens of millions of dollars in a single year, under his proposed tax changes, a New York Times analysis has found.

On Wednesday, the White House announced a sweeping plan to cut a variety of taxes that would overwhelmingly benefit the wealthy. The estimate of Mr. Trump’s savings is based in part on information from his 2005 federal tax return. The analysis compares what his tax burden would be under current law with what it would be under the proposal.

Mr. Trump’s 2005 return is the most recent available publicly and was released in March by David Cay Johnston, a former New York Times reporter. The Times’s figure also relies on an estimate of Mr. Trump’s net worth, calculated by the Bloomberg Billionaire’s Index to be $2.86 billion.

“I don’t benefit. I don’t benefit,” Mr. Trump said on Wednesday. “In fact, very, very strongly, as you see, I think there’s very little benefit for people of wealth.”

In fact, high-income earners like Mr. Trump are likely to benefit disproportionately if the White House proposal becomes law. The estimates, calculated with the help of Robert Willens, an accounting expert, and Stephen Breitstone, a tax lawyer, provide a view into precisely how.

My general reaction to this is: “So what?” Maybe even: “Good!”

Here’s the simple truth: the wealthy pay the overwhelming share of income taxes in this country. Here are the facts:

The top 1% of taxpayers pay a higher effective income-tax rate than any other group (around 23%, according to a report released by the Tax Policy Center in 2014) — nearly seven times higher than those in the bottom 50%.

So guess what? If you relieve that burden, who’s going to benefit? The wealthy.

And yet Big Media will always attack every single effort to cut taxes by pointing out that the cut benefits the wealthy. And they will never, ever point out the context I just gave you. True to form, the New York Times article I link here does not say a word about how much the rich pay.

Trump shouldn’t lie about it, of course. But he lies about everything.

I should add: Democrats like to pretend that soaking the rich will solve our deficit problem. That is a dirty lie. You can’t tax your way out of this problem. You could take 100% of what millionaires make — and assume that they wouldn’t stop working if you did (which of course they would) — and it wouldn’t come close to solving the deficit problem we have.

Nor does cutting discretionary spending come close to solving the problem.

The only solution is cutting entitlements. Which Trump has taken off the table. (And, to be honest, so has the voting public.)

This is why we’re headed for a crash. But lowering taxes isn’t going to change things much at all. So this handwringing over rich people — even Trump! — benefitting from tax cuts is horse feces. It’s nothing more than Big Media’s usual excuse for opposing every tax cut ever proposed.

[Cross-posted at RedState.]

4 Comments »

  1. I haven’t looked into the details of the tax bill so I don’t have an opinion on it yet, but I do have an opinion on the political optics of one part of it; there’s genius involved!

    It’s the part that terminates the deductions for state and local taxes. This deduction is especially useful to very wealthy people who live in high-local-tax environs, such as NYC. In other words, deep blue states and cities. Terminating it means they lose the deductions. This amounts to a tax hike on the very wealthy in those areas, plus undercuts the defacto federal subsidy of high local taxes.

    So, practical implications aside and just looking at the political optics, wow; they now have to come out and argue against a tax hike on the very rich.

    If (and it’s a mighty big if) this angle is played correctly, it can be devastating to the democrats.

    Comment by Arizona CJ — 9/29/2017 @ 11:57 am

  2. My guess is that will be added back in in a compromise amendment, CJ.

    Comment by DRJ — 9/29/2017 @ 2:31 pm

  3. Oh, please! Patterico pointed out on the main site that it’s not only real taxes but also mortgage interest. They’re both hits on individual homeowners. Rental unit owners will still be able to business expense them. So it will be the homeowners in the rural, suburban and “neighborhood” areas that will be hurt. Not the yuppies in the concrete canyons, and not their landlords (the Trumps and the Kushners) neither.

    Comment by nk — 9/29/2017 @ 4:42 pm

  4. That would cost us thousands at a time when we are about to send a child to college.

    Comment by Patterico — 9/29/2017 @ 6:44 pm

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