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Donald Trump Walks Back His Only Detailed Economic Proposal

Republican presidential candidate Donald Trump CREDIT: AP PHOTO/CHARLES REX ARBOGAST
Republican presidential candidate Donald Trump CREDIT: AP PHOTO/CHARLES REX ARBOGAST

Donald Trump, the presumptive Republican presidential nominee, has been difficult to pin down when it comes to the economy. Among other vague promises, he says he wants to crack down on China and trade in order to revive jobs. He promises fantastic economic growth rates without much explanation of how he would make them happen.

But in at least one area, he’s been uncharacteristically detailed. The campaign released a tax reform plan in September that laid out exactly how he would lower tax rates on businesses and individuals. While he claimed that it would give the middle class “major tax relief” while making hedge fund managers pay, analyses found that in fact most of the benefits would accrue to the wealthiest 1 percent and leave very little for everyone else.

When pressed on those details on CNBC on Thursday morning, rather than defend his plan, Trump started to walk it back.

“Given that you’ve championed the middle class so much in your speeches, one of the critiques of your tax plan is that 40 percent…of the tax cuts end up going to the top 1 percent under the current plan,” the host asked him. “How do you square that?”

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“I will say this, and I’m not necessarily a huge fan of that,” Trump responded. “I’m so much more into the middle class who have just been absolutely forgotten in our country.”

He went on to explain that his tax plan shouldn’t be taken as a literal description of his priorities, but a general starting point. “When you put out a tax plan, you are going to start negotiating,” he said. “You’re not going to say, ‘Okay, this is our tax plan, lots of love folks.’ There’s going to be a negotiation back and forth.”

During this negotiation, he said, the tax relief he would offer for the middle class would theoretically increase. “I can see that going up, to be honest with you,” he said. “I could see that going up and I think that probably will happen.”

When you put out a tax plan, you are going to start negotiating

Trump’s plan is already extremely costly: it would reduce government revenues by $9.5 trillion over a decade. If all the details remained the same but tax relief for the middle class increased, it would clock in even higher. Trump didn’t offer up any further details on what a final tax reform package would look like.

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Changing his stance on his own plan is at least more consistent with the facts. When pressed on how it would treat the wealthy in a debate in April, Trump simply said that under his plan “the very rich are going to end up probably paying more,” despite the fact that all of the existing analyses said otherwise.

He’s also starting with some false conceptions about the United States tax climate. Earlier in the interview with CNBC on Thursday he claimed, “We’re the highest taxed nation in the world,” later adding that the middle class is “being taxed at a much higher rate” than two decades ago. Neither is true. The U.S. is one of the lowest-taxed developed countries in the world. Middle-class families, meanwhile, pay lower rates than they did in the mid-90s.

Taxes weren’t the only issue Trump changed his mind on after becoming the presumptive Republican nominee. In an interview with CNN, Trump said he is “looking at” increasing the minimum wage because it has to be “something that you can live on.” Yet just months ago he said wages in the U.S. are “too high” and the minimum wage has to be left “the way it is” so that the country can compete internationally.