NY Times: Trump Would Save Over $1 Billion On His Own Tax Plan
While low and middle-income families get shafted, Donald Trump and his billionaire friends make out like bandits.
Donald Trump has insisted over and over again that his tax plan would not benefit him. Just working Americans would benefit, Trump says. Rich folk like him would be hurt by it.
Durning an event rolling out his tax plan Trump said “I don’t benefit. I don’t benefit. In fact, very, very strongly, as you see, I think there’s very little benefit for people of wealth.”
Well, like most Trump promises, it turns out to be a big fat lie.
According to a new analysis by The New York Times, Donald Trump stands to save over $1 billion if his tax plan becomes law.
The Times used the most recently available year, which is Donald Trump’s 2005 tax returns which were published by David Cay Johnston earlier this year.
Elimination of the estate tax
Rich people are always complaining about the estate tax, which taxes the money and assets that super wealthy people leave their heirs when they die. Republicans are always trying to claim the estate tax somehow hurts middle class families, but the facts don’t back that up. For 2017, the estate tax only affects people who want to leave more than $11 million to their heirs. Do you know a lot of middle-class people with $11 million estates? Nope neither do I.
As the New York Times lays out, Donald Trump would benefit most from his tax plans estate tax elimination. Under the current rules, his estate would be taxed at 40 percent.
But if Trump’s tax plan becomes law, his family would get a tax savings of $1.1 billion.
Alternative Minimum Tax
But the savings for Trump doesn’t stop there. Based on his 2005 tax return, Trump would save $31 million from the elimination of the Alternative Minimum Tax (AMT). The AMT was originally meant to make sure that make sure the super wealthy couldn’t use deductions and fancy accounting to avoid paying any taxes. So, in Donald Trump’s case at least, the AMT is working pretty good. However, it’s worth noting that a lot of upper-middle-class folks get hit with the AMT so it’s not altogether outrageous to consider revising it. But maybe not for billionaires?
Pass-through businesses
Donald Trump is proposing to lower the tax rate for pass-through businesses like LLCs, S-corporations and partnerships to 25 percent. The way these entities work, is that the income from the company is passed through to the owner or owners and is taxed as personal income tax. So if an LLC business makes $1 million a year, that $1 million in income would get taxed as personal income on the business owner’s taxes. And people who make $1 million a year, pay the highest tax rate of 39 percent.
Donald Trump wants to lower the maximum that business owners can pay in taxes to 25 percent. He and Republicans claim this is meant to be a break for middle-class small business owners. But here is the thing, if they these “middle-class small business owners” are making middle-class money, they are not paying the top tax rate right now.
The people who will really benefit from Trump’s plan to lower the tax rate for pass-through entities are people who make lots and lots of money including Trump himself.
According to The New York Times, Donald Trump would save about $16 million by lowering the tax on LLCs and other pass-through entities.
It’s also worth noting that Trump owns hundreds of LLCs.
You can read the full New York Times report here.
