Donald Trump's tax plan is at least true to form. The boisterous billionaire says 75 million Americans won't pay anything to Uncle Sam if he's US president and business rates will be halved. Missing is how to pay for these cuts and many more.
In basic structure, Trump's proposal resembles what other Republicans are presenting. Jeb Bush, another of the dozen or so White House wannabes from the party, also would cut tax rates and eliminate most loopholes and deductions. Trump, the early front-runner for the GOP nomination, is characteristically more aggressive.
He would eliminate taxes for households earning less than $50,000 a year. Then, Trump would strip down the number of progressive rates to three, with the highest at 25 per cent. That's lower than today's 39.6 per cent and Bush's suggested 28 percent. Eliminating loopholes might go some way to align the figures, but Trump would keep a few of the largest: those for mortgage interest and charitable giving.
More From This Section
Again, Trump points to closing loopholes, including one for profit earned by private equity and other investing practitioners, but it would be almost impossible to cover the expenses. Bush's less ambitious proposal would cost between $1.2 trillion and $3.4 trillion over a decade, according to his own economists.
Trump reckons his ideas will spur growth, which will take care of most everything. More likely is that radical cuts to US programmes would be needed to keep deficits from growing. And that won't be easy. Federal discretionary spending is only projected at $12.7 trillion over a decade, meaning defense, retirement obligations and other politically prickly budgets would be involved.
There can be no benefit of doubt for a man who has failed to show how he balances his personal checkbook - questions persist about his net worth - and one whose companies have sought bankruptcy protection four times. Even the author of "The Art of the Deal" will struggle to negotiate his way through such an implausible-sounding tax plan.
