Presidential candidate Donald Trump today backed away a bit from his taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. plan, describing it as open to negotiation.
Pressed by CNBC on Thursday as to how he could simultaneously brand himself as a populist who will take on wealthy elites while proposing sweeping tax cuts for billionaires, Trump backed away from his plan.
“I am not necessarily a huge fan of that,” he said. “I am so much more into the middle class who have just been absolutely forgotten in our country.”
Trump described his tax proposal, which was the most detailed policy paper he put out in the campaign, as merely a starting point for a future deal.
“You know, when you put out a tax plan, you are going to start negotiating,” he said. “You don’t say, ‘OK, this is our tax plan, lots of luck, folks.’ There will be negotiation back and forth. And I can see that going up, to be honest with you.”
The Trump tax plan has attracted criticism in two main areas: first, in that it loses too much revenue, and second, in that it primarily benefits high-income taxpayers. Both are shown in the Tax Foundation analysis published last year. A third criticism, albeit a more subtle one, is that Trump’s plan reduces rates without doing much to improve tax bases, and therefore generates less growth than it could otherwise, as Tax Foundation President Scott Hodge has argued.
If Trump moderates some of the elements of his tax plan, he may want to consider getting rid of the preferential rate for pass through income, which benefits wealthier Americans and encourages relabeling, and also reducing the size of the zero bracket in his plan, which is about four times larger than the current standard deductionThe standard deduction reduces a taxpayer’s taxable income by a set amount determined by the government. It was nearly doubled for all classes of filers by the 2017 Tax Cuts and Jobs Act (TCJA) as an incentive for taxpayers not to itemize deductions when filing their federal income taxes. , and contributes substantially to the plan’s $10 trillion revenue loss.Share