Trump’s Tax Plan

Wall Street Journal ^ | Sept. 29, 2015 7:21 a.m. ET | James Freeman

[Cringing Negativism Network]

Donald Trump describes his tax plan in a Journal op-ed, promising “four brackets: 0%, 10%, 20% and 25%. This new code eliminates the marriage penalty and the alternative minimum tax while providing the lowest tax rates since before World War II.” Mr. Trump adds that “this plan eliminates the death tax.” Also, he intends to “allow the middle class to keep most of their deductions while eliminating many of the deductions for the very rich.” And on the corporate side, “any business of any size will pay no more than 15% of its business income in taxes.”

http://www.wsj.com/articles/trumps-tax-plan-1443525711

[chimera]

Would not the same arguments apply to a consumption tax? Income taxes are based on reported income. Likewise, consumption taxes would be based on reported sales. What if those sales were not reported?

My neighbor is a mechanic and does repair work for friends and acquaintances on the side. Cash only. He fabricates parts which adds value to the raw materials. Cash only again. No reporting of the value added or the labor. Would not an excessive consumption tax lead to more "underground economy" operations? I'm not talking about drug dealing and illegal gambling, just everyday work, selling and exchanging items instead of going to the store, that kind of thing.

[chimera]

I don't like the 0% gambit. IF we must tax income at all, it should be such that everyone pays something. I know the low-end 1%ers wouldn't really contribute all that much, and, as usual, those in the 25% range would end up shouldering most of the burden, but, geez, if we have to take the hit, let everyone take some of the beating, and not get off scot free. Shared pain if only truly shared if everyone feels something. Not a pretty image, I know, but taxes are just that way.

[EternalVigilance]

You’re never going to totally eliminate tax evasion, no matter what system you choose.

But the fact is that the vast majority of retail transactions take place in legitimate retail stores, like the big boxes, etc. Such businesses have little to gain, and everything to lose, from fudging on something as basic as a simple sales tax.

[mmichaels1970]

If Trump’s plans for health care are not socialist, there is no such thing as socialism.

I would highly recommend waiting just a bit before judging his health care plan. When speaking off the cuff, Trump does admittedly leave wide room for speculation and interpretation as to where he's going on a given subject.

However, as a part of a long campaign, he has demonstrated that he eventually gets his ideas organized into a coherent proposal. He calls a presser to announce it. He immediately publishes the full text of his idea on his website.

So far he has done this with immigration, second amendment, and tax policy. I've read each one and strongly support the first two and hesitantly support the third. But all of these issues are way more coherent and way more conservative than the wild speculation prior to their release would have had me believe.

I fully expect he will follow the same model when it comes to national security policy, healthcare, and others. This is why the currently speculation regarding "socialized healthcare" doesn't sway me. I'm going to give him a chance to put his idea in writing. I will then judge his proposal as fairly as I can.

[EternalVigilance]

By the way, under any decent RETAIL sales tax, none of the stages of adding value to products would be taxed.

[EternalVigilance]

Look, “we (in government) have to take care of everybody” is as purely socialist as an idea can get. You just can’t get around it.

[chimera]

I'm not disputing the value of a consumption tax, although I have concerns that in a consumer-driven economy any more disincentives to economic activity (taxes) will be a negative influence.

On a (perhaps) related issue, I have always had a nagging concern about how the tax system has turned employers and retailers into tax collectors for the government. Sometimes I wonder what would happen if employers, for example, were not forced into the role of tax collector, and the government simply sent everyone a tax bill on January 31st, payable on April 15th, based on their reported income. My guess is that most people would be shocked to see, in a lump sum, what their tax burden really is, and then think about how not to pay the bill.

[csmusaret]

I am by tax reform like I am by immigration reform....show me a secure border first and show me the spending cuts first.

[mmichaels1970]

My neighbor is a mechanic and does repair work for friends and acquaintances on the side. Cash only. He fabricates parts which adds value to the raw materials. Cash only again. No reporting of the value added or the labor. Would not an excessive consumption tax lead to more "underground economy" operations?

I would guess your neighbor is already "underground" right? I would guess he's not declaring the cash on his income taxes. So in this case, you'd have a wash in the underground economy. The income tax dodgers become sales tax dodgers.

The good thing, however, is that your neighbor is going to take the $200 cash down to AutoZone to pick up some cool new tools for his garage. So at least eventually that $200 ends up with a tax on it.

[EternalVigilance]

You know, as soon as government demands to know exactly what you’ve earned, you really don’t have a Fourth Amendment any more.

We have to have taxes to pay for the legitimate tasks we have appointed to government.

The least intrusive, most efficient, simplest means of collecting it is a retail sales tax.

[mmichaels1970]

Look, “we (in government) have to take care of everybody” is as purely socialist as an idea can get. You just can’t get around it.

Of course I can. By waiting until he puts his full proposal in writing and publishes it for all to read and scrutinize. I'm confident he will do so.

If it is socialized at that point, I will concede. But not until then.

[EternalVigilance]

I’m just going by what he has repeatedly said. You either believe him or you don’t.

[Balding_Eagle]

Trump said there is a lot of waste which can be eliminated.

At one point he said at least 20% without changing the output.

[chimera]

Its true that in this example all of the activity is not “underground” as you just have to buy (at retail) certain things and raw materials. But, in this case, he does do a lot of things to minimize or completely avoid those taxes (mail order, buying out of state in lower-tax places, etc.). Those places aren't zero in terms of tax burden, but there are places you can do business were local and state taxes are lower, or (for local taxes). essentially zero.

[mmichaels1970]

I’m just going by what he has repeatedly said. You either believe him or you don’t.

I will admit, Trump goes a little too fast for me. I find I have a difficult time keeping up. The last thing I heard directly out of his mouth on healthcare was about allowing competition across state lines among insurance companies. I believe it was during the CNN debate but I'm not entirely sure.

So much static being fired off in all directions this cycle. So many people out to destroy one another. I'm just going to read what Trump puts in writing and go from there.

[MarMema]

Like the IRS. That’s waste.

[mmichaels1970]

But, in this case, he does do a lot of things to minimize or completely avoid those taxes

I get what you're saying. I will cede that no tax plan is ever going to be perfect.

[chimera]

I understand. I was just wondering what it would take to wake people up to what their true tax burden really is. Sending everyone a bill instead of withholding pay-as-you-go might do it. But the tax bill writers knew the slow-boil pot was the way to do it to keep the torches and pitchforks away.

[samtheman]

Trump isn’t so stupid as to chase after tax plans that aren’t going to get enacted—or get him elected. He is thankfully a more pragmatic man than that who will propose what can get him elected and what he can get through Congress.

A 15% corporate income tax is far better than a 35% corporate income tax, and all we need is whining purists to assure that Barry does get his third term after all.

---

I agree.

One more point worth mentioning in all this.

The Wall.

I want the Wall.

I’d rather have The Wall and a tweaking of our current tax system than a sure-to-fail promise to revamp the tax system bring on a failure that will prevent The Wall.

The Wall is #1.

The tax system is #2.

In my mind.

[chimera]

No, it isn't, and in the end the best thing is to minimize the waste of things the government should not be doing and thereby reduce the tax burden we all bear. I think Trump understands this. So do several of the other candidates, but only Trump seems to be willing to take it on.

On the other side we have Hillary and Booby Sanders who want nothing more than to expand government and raise taxes (especially Sanders). So, right now, I'm willing to support about anyone on our side just to keep the rodents away from the WH.