Photo credit: U.S. Air Force Tech. Sgt. Brigitte N. Brantley, Public Domain
Let’s be perfectly clear. Rich politicians passing massive tax cuts for themselves, their own families and all their wealthy friends is not tax reform. It’s the worst kind of corrupt Washington politics that angers ordinary Americans—making them want to elect a president who will bust up the place and drain the swamp. That’s why it was so bizarre that many of those angry Americans somehow believed an arrogant, self-obsessed billionaire looking down on them from a golden tower would suddenly start putting the interests of ordinary Americans above his own.
That childish fantasy disappeared when Donald Trump—the fake hero of forgotten Americans—introduced what he promised would be the largest tax cuts in political history by telling the most outrageously transparent, easily provable lies claiming that low-income and middle-income families would benefit, not wealthy Americans like himself. This is what Trump said right out loud:
“Our framework includes our explicit commitment that tax reform will protect low-income and middle-income households. Not the wealthy and well-connected. They can call me all they want; I’m doing the right thing. And it’s not good for me, believe me.”
Nearly everyone in America other than those willfully deluding themselves now knows Trump lies nearly every time he speaks; fact checkers have proven that repeatedly from the moment he took office. Even after Trump’s most shameless down-is-up lies are documented, he keeps repeating them. Either Trump has no concept of reality or he thinks his supporters are stupid enough to believe him.
It’s possible Trump really doesn’t know much about what is going on in his government, but over the years he’s demonstrated a clear vision of how to manipulate tax laws to his personal advantage. That’s why it’s preposterous for him to claim a series of proposed tax cuts specifically designed to overwhelmingly benefit the wealthy won’t flow to him personally. For starters, Trump cuts the top tax rate for the wealthiest taxpayers from 39.6% to 35%, but it’s actually even worse than that. Many in that category (and, guess what? Income from most of Trump’s businesses qualifies) would pay an even lower “pass-through” rate of 25%.
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No Taxes on the Rich
That’s just the beginning. Trump’s cuts also eliminate three other taxes that apply only to the wealthy: a 3.8% Obamacare tax on investment income; the estate tax that applies only to estates valued at more than $5.5 million; and the Alternative Minimum Tax (AMT) which was originally passed to prevent millionaires and billionaires from using so many tax loopholes that they paid no taxes at all.
Since Trump is the first president or presidential candidate to refuse to release his personal tax returns in 40 years, it’s difficult to know precisely how large Trump’s windfall would be—other than massive. David Cay Johnston, a former Pulitzer Prize-winning New York Times financial reporter who has documented massive tax giveaways to wealthy individuals and corporations, obtained financial details from Trump’s 2005 tax return showing he paid $38 million on $150 million in taxable income after claiming more than $100 million in losses.
Guess what? In that year—the most recent for which Donald Trump’s tax information is available—he paid $31 million to satisfy the Alternative Minimum Tax; if the AMT were repealed, Trump would owe only about $7 million—more than an 85% tax reduction.
Of course, that’s just chicken feed compared to what Trump’s family would reap if Republicans succeed in finally completely eviscerating the estate tax, which, despite Trump’s lies about saving struggling family farmers, applies only to the wealthiest one-fifth of 1% of the population. Based on a Forbes estimate that Trump is worth $3.5 billion, eliminating the estate tax would save the Trump family as much as $1.4 billion, leaving Donald Jr., Ivanka, Eric, Tiffany and Barron only $2.1 billion to get by on.
This might be a good time to mention that Trump’s tax cuts, besides resulting in such massive giveaways to the wealthy, actually would raise the bottom tax rate for low-income taxpayers from 10% to 12%, and for middle-class taxpayers, changes in personal and child exemptions means that about a third of them would pay higher taxes, not lower.
Trump’s supporters aren’t nearly as stupid as he thinks they are. More than seven in 10 Americans correctly believe the U.S. tax system is rigged in favor of the wealthy. That’s why Trump’s supporters cheered lustily at those hysterical rallies when he said he would raise taxes on hedge fund managers. (No, his tax plan doesn’t.)
Simply to avoid embarrassing financial corruption at the top of a Republican administration run by billionaires and millionaires, both Republicans and Democrats in both houses of Congress should insist Trump release his tax returns to show Americans how much he and his family would personally benefit before they vote on any of his tax cut proposals.
No one can trust a swamp creature to drain a swamp.
