The largest grassroots taxpayer organization in the United States is lauding the tax reform proposals of Republican presidential nominee Donald Trump but sees little commitment to rein in runaway federal spending or even get specific about big ticket policy goals.
Trump addressed the Detroit Economic Club on Monday, calling for across the board tax cuts for individuals, huge cuts in the corporate tax rate and bringing simplicity to the tax code by eliminating loopholes and reducing the number of tax brackets from seven to three.
“The heart of his plan is tax simplification, which is very important . The IRS has estimated that its entire paperwork burden for all of its forms and requirements will amount to about nine billion hours. That represents a huge economic dead weight loss of people spending time on their tax forms, instead of doing more productive things with their money,” said National Taxpayers Union Research Director Demian Brady.
The centerpiece of Trump’s tax plan is lowering the corporate tax rate from nearly 40 percent down to 15 percent. Brady notes that reduction is even bigger than congressional Republicans are advocating and he says the impact of that would be felt in every American family.
“This would be just a great boon to the economy. It’s not the businesses that pay these taxes. It’s the consumer that pays them through higher prices, so across the board this will help people,” said Brady, who is also excited that Trump wants to eliminate the estate tax, known derisively on the right as the death tax.
“He’s proposed to eliminate the death tax, which is just a huge waste of time. The people who have money that fall under this spend so much time and money on tax avoidance that this death tax is not worth the money that it raises. Let people do what they want to do with their money and they’ve already been taxed on it when it was originally earned,” said Brady.
Trump says his tax plan is aimed at boosting the middle class, but Brady warns middle class investors might not be too happy with the nominee’s approach to capital gains taxes.
“It’s basically a tax on investment through carried interest and capital gains. What this does is raise the cost of investment, which will be bad for mutual funds and for pension plans around the country. They’re trying to tax the income of the people who are going out and making these investment decisions, but they’re going to pass along their costs to their customers,” said Brady.
While is largely bullish on Trump’s approach to tax policy, he is far from impressed about Trump’s refusal to articulate a plan to get federal spending under control.
“One problem that you typically run into with Donald Trump is just a lack of specifics,” said Brady. “He needs to provide more details on some of the things he’d like to do, particularly when it comes to long-term budget reforms.”
Trump frequently mentions getting rid of waste, fraud and abuse throughout the government, but Brady warns that alone won’t make much of dent in the effort to balance the federal books. However, he says both major party nominees have no answers for bringing spending under control.
“We really want to hear spending reform ideas from these candidates. Unfortunately, we’re getting a lot more information from the candidates on how they would increase spending , rather than putting in some sort of budgetary restraint,” said Brady.
As of now, Brady says Trump’s spending plans would add billions to the deficit, but he says those plans are shifting all the time.
“Last week we had Trump as a net cutter. His net plans that we’re able to score with specificity, would have reduced spending by about $56 billion a year,” said Brady. “Then last week, he said he would double Hillary Clinton’s infrastructure spending. So that jumps his spending up to $22 billion in new spending per year,” said Brady.
But Brady says even that number fails to account for other areas where Trump won’t offer details.
“He has called for the largest increases of the military in history, but he hasn’t said what that would be. He has other areas where he hasn’t been too specific . In the speech, he called, perhaps, for new spending on law enforcement, but we’re not exactly sure what that might be,” said Brady.
But as concerned as Brady is about what the final price tag for the Trump agenda might be, he says Hillary Clinton’s agenda carries much more red ink.
“Her spending proposals would increase spending by about $175 billion annually, so it’s a much more aggressive big government agenda than we see from Donald Trump,” said Brady.
