o 2016 presidential contender still in the race has a tax-cut plan as large as the one Donald Trump is proposing, nor does anyone now gone. Indeed, maybe no leading presidential contender has ever proposed cutting taxes as deeply. Trump-onomics would reduce federal tax revenue by nearly $10 trillion over a decade, according to the Tax Policy Center (TPC). As a share of GDP, the Trump tax cuts are roughly twice as large as those proposed and enacted by JFK, LBJ, Ronald Reagan, and George W. Bush. Now for some on the right, no more needs to be said. Reducing government’s take for taxpayers is an intrinsically good thing. And there are those who will argue that the less of our money government confiscates, the less it can and will spend, even though this “starve the beast” theory of public finance has never worked out in practice.

But slashing government tax revenue by a third isn’t the point for Trump (who, by the way, doesn’t concede such a fiscal result). When evaluating the Trump plan, one reasonable way to judge it is by the goals Trump himself sets for it. And they’re straightforward. He says he wants to provide tax relief for the middle class and accelerate economic growth without deepening the federal budget deficit and national debt.

On the individual side, the plan would consolidate the current seven tax brackets into four, lowering the top rate on labor income to 25 percent from the current 39.6 percent. Top investment tax rates would fall to 20 percent from 23.8 percent. Married couples making $50,000 or less would pay no income taxes at all, whether on their work or investments. The alternative minimum tax would be repealed. Itemized deductions would be limited in an unspecified way. On the business side, Trump would cut the corporate income tax rate to 15 percent from the current 35 percent, currently the highest among advanced economies. The top rate on pass-through businesses, such as partnerships, would also be 15 percent. Trump would impose a one-time transition tax of 10 percent on existing unrepatriated foreign income of U.S. companies.

Let us judge the plan by Trump’s own criteria. Would it help the middle class? Given that this plan pretty much cuts taxes for just about everyone who pays income taxes, it would certainly appear to. On a static basis—without assuming that tax cuts boost economic growth and worker incomes—the Trump plan would cut taxes by an average of $5,000 for U.S. households, with the middle fifth seeing a $3,600 increase in after-tax income. Factor in an extremely optimistic analysis of how the tax cuts would affect economic growth, and middle-class income gains would end up twice as great, if not more. The Tax Foundation’s model finds that middle-income taxpayers in the 30th to 70th percentiles would see a nearly 20 percent increase in their long-term after-tax income versus 6 percent on a static basis. Finally, the Trump plan would dramatically increase the number of households paying no income tax at all, to 110 million up from the current 77 million.

Despite Trump’s populist tone, his plan would also slash taxes for the rich and super-rich, as well as the middle. The top 1 percent would get a $400,000 tax cut on a static basis, the TPC calculates, while the top 0.1 percent would get a reduction of nearly $2 million. Trump has gone out of his way to specify one group of rich folks who don’t deserve a tax cut: hedge-fund managers. Trump has described them as paper shufflers who “get away with murder.” At a debate, he said: “The hedge-fund guys won’t like me as much as they like me right now—I know ’em all. But they’ll pay more.” They probably wouldn’t. Yes, Trump would make them pay ordinary income tax rates on the “carried interest” chunk of their income—earnings that are now taxed at preferential investment tax rates of 23.8 percent (the capital-gains rate). But those ordinary rates, recall, would be only 25 percent. Moreover, a lower tax rate on so-called pass-through income means that, effectively, carried interest income would be taxed at a top rate of just 15 percent. In the end, Trump wouldn’t raise taxes on hedge-fund managers; he would cut them by a more than a third.

Cooking up a plan that massively cuts taxes is easy. But designing such tax cuts so they don’t explode the already large U.S. government debt makes the task vastly more difficult, if not impossible. Even if you assume the Tax Foundation’s optimistic “dynamic scoring” of the Trump plan, it would still reduce the government’s revenues over a decade by $10 trillion (as opposed to the $12 trillion number, if you assume no growth effects from the Trump tax cuts). Anyway you slice it, the Trump plan would make the U.S. debt situation markedly worse. Indeed, once you add in higher debt-interest costs, the Trump plan would cause the national debt nearly to double in size over the next 20 years as a share of the economy. And that huge increase would almost certainly have a dampening effect on economic growth. Indeed, the parts of the Trump plan costing the most revenue—the individual income tax cuts—are the very parts that provide the least amount of growth. According to the Tax Foundation, for instance, Marco Rubio’s tax proposal would have cost the government a third as much as the Trump plan while generating more economic growth.

In other words, the pieces of the Trump tax package really don’t fit together in any sort of coherent way. It features cuts so large that any growth they generate might get swallowed by unprecedented debt increases. It supposedly tries to sock it to the undeserving wealthy but will actually reduce their tax burden.

It’s almost as if the point of this plan has little to do with outlining a sound economic approach that meets America’s economic challenges. Rather, it looks like a naked appeal to supply-siders and low-information voters who get the bulk of their economic information from talk radio. These are potential supporters who might be willing to accept the idea that the Trump plan could possibly pay for itself through faster growth—even though the Committee for a Responsible Federal Budget calculates such a feat would require the economy to grow at 10 percent a year for a decade. That would be three times the growth rate generously calculated by the Tax Foundation and twice as fast as the fastest growth period in the last 60 years (which was between 1959 and 1968). Only poor nations playing economic catch-up, like China or India, grow so quickly.
Trump says America is a poor nation, but we’re not that poor.

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