President Donald Trump walked back a key promise related to his tax plan during an interview with Forbes released late Tuesday. In the weeks leading up to the unveiling of his tax plan, Trump repeatedly stated that he would not personally benefit from it. Now he is saying otherwise.
When pressed by Forbes’ Randall Lane on whether he believes he won’t personally benefit from his own tax plan, Trump responded by saying “everybody benefits.”
“Well, what I say is that the, this whole concept, everybody benefits if the country does well,” Trump said. “We all do. You guys benefit. Everybody benefits if the country does well.”
Trump later added that by lowering the corporate tax rate from 35 to 20 percent, he’s helping out lower to middle income Americans.
“You see, you have to understand, if what I do is good for the middle class, that’s also good for me, and then if I do what’s good for the upper class, that’s good for me. Don’t forget — the companies that we’re talking about — many people own some of these companies,” Trump told Lane. “And sometimes wealthy people own them, and sometimes poor people own them. But when we make life and business better for companies, that’s a great thing for everybody, including me.”
The president’s tax plan includes a provision that would lower the tax rate of “pass-through” businesses, which include partnerships, hedge funds, and LLCs — not necessarily the “small businesses” Trump says will benefit from this measure. These businesses don’t pay the corporate rate; rather, their owners pay taxes on their share of the profits from the business at their own personal rate, which would be lowered to 35 percent under the Trump plan.
The special pass-through provision would cap the rate on income from pass-through businesses at just 25 percent, allowing for some pass-through business owners to re-characterize their income to receive this special low rate.
The Trump Organization — which is still owned by the president — itself owns more than 500 pass-through business entities.
In August, Trump told a crowd in Missouri that his own taxes would rise under the GOP-Trump plan. He echoed this statement again late September when he announced the plan, calling it “not good” for him.
Since the announcement of the plan, multiple tax experts and policy centers have found that his proposed plan is, in reality, very good for Trump. Just one measure alone, the repeal of the estate tax, would award the president with a $4 billion dollar tax cut, assuming he is worth the $10 billion dollars that he says he is.
And the Trump tax plan is good for the “wealthy and well-connected” too, the very group Trump said would also not receive any tax cuts from his plan.
The Tax Policy Center, however, found in a recent study of the proposed Trump-GOP tax plan that in 2018, taxpayers in the top 1 percent (which includes incomes of above $730,000), would receive roughly 53 percent of the total tax benefit and their after-tax income would increase an average of 8.5 percent. Meanwhile, taxpayers in the bottom 95 percent would see average after-tax incomes increase between 0.5 and 1.2 percent. And by 2027, the top 1 percent would get nearly 80 percent of tax cuts.