Republican presidential nominee Donald Trump has already talked at length about his plans to reform U.S. trade relations and released a tax plan. But on Thursday, he put out an update to the latter and packaged many of his past plans into what he calls an “economic policy package.”
And in the fact sheet describing the policies, he makes some dubious claims.
Trump’s original tax plan proposed having just three tax brackets set at 10, 20, and 25 percent, which would have meant bringing the top rate paid by the wealthiest down from 39.6 percent. The new plan tweaks those levels, bringing them in line with the plan put forward by Rep. Paul Ryan (R-WI) and House Republicans, making them instead 12, 25, and 33 percent.
But much of the rest of Trump’s plan remains intact, including reducing the corporate tax rate to 15 percent, the lowest proposed by any Republican who ran this cycle; repealing the estate tax that’s levied on the richest 0.2 percent of Americans; adding “millions” more to the ranks of people who are too poor to owe federal income taxes; and getting rid of carried interest loophole hedge fund managers use to pay lower taxes while still reducing the capital gains tax that allows those who make money from investments to pay a lower rate.
Trump claims that under this updated plan, “The greatest percentage reduction in tax bill goes to lower income taxpayers.” But it’s hard to see how. Under his original proposal, two different analyses found that, with everything taken together, the rich would make off with the most benefits by far. One found that the top fifth of the richest Americans would get more than two-thirds of the benefits, while the poorest fifth would get 0.8 percent. The other found that the top 1 percent would see its income increase the most, by over 21 percent, while the poorest would get the least.
Making the tax brackets more like the House Republican plan won’t change that picture. The same analysis that found the 1 percent faring best under Trump’s plan found the same for Ryan’s plan, as did another. On a static basis, without making assumptions about how tax cuts might impact the economy, the 1 percent would get a 5.3 percent boost to its income, while the bottom fifth would see it rise by just 0.3 percent.
Trump has also put forward changes to the tax code to help parents pay for childcare, but the wealthy would still see the biggest benefit from them.
Trump also claims that “Trump economists” estimate that his proposals for the tax code, trade relations, the energy industry, and government regulation would bring a huge boost to the economy. He states that they would “conservatively” increase average annual growth to 3.5 percent while creating as many as 25 million jobs within ten years.
That runs contra to what independent analysts have found. Moody’s Analytics found that Trump’s tax, trade, and immigration policies would actually cost 3.5 million jobs and annual growth would average just 1.4 percent. Oxford Economics estimated that his plans would slice $1 trillion off of GDP.