Lion of the Blogosphere

Coming on Monday: Trump Tax Plan

It’s clear that Trump isn’t going to propose something incredibly stupid like abolishing income tax and replacing it with a sales tax. (Yes, Huckabee’s tax plan is incredibly stupid.)

Besides removing the carried interest loophole which treats hedge fund manager income as pass-through partnership income (thus qualifying for the lower capital gains rate), it’s not clear what’s going to be in the Plan.

Written by Lion of the Blogosphere

September 27, 2015 at 9:49 PM

Posted in Politics, Taxes

26 Responses

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  1. Pleased to see Trump is step by step rolling out his agenda. By November he should blanket the airwaves with ads to lock up the nomination – remember he’s hardly done any advertising, and he’s wealthy enough to entirely finance both a primary and general election campaign.

    It’s clear that Trump isn’t going to propose something incredibly stupid like abolishing income tax and replacing it with a sales tax.

    I’m not keen on that either. How about replacing all Federal payroll taxes with a national sales tax?

    The Undiscovered Jew

    September 27, 2015 at 10:09 PM

  2. I hope it’s going to be rational and not some huge deficit-busting give away to the plutocrats like the Bush plan. Republicans are afraid to propose any kind of sane tax reform because they’re always trying to outbid each other.

    I’d love to see a plan that mostly closes loopholes and simplifies middle class and small business returns.

    Corporate tax code reform would be very productive to return jobs to the country, too. We could go to a territorial system like every singe first world country besides ours. Corporate rates could be cut from the highest in the world down to typical with a 35% to 20% cut and attract a lot of jobs. We could throw out scam corporate tax loopholes and giveaways like business meals and entertainment, the R&D tax credit, renewable energy tax credits, non-renewable energy depletion allowances, qualified production activities, and the biggies: attributing US-source income to foreign ventures and the business interest deduction.


    September 27, 2015 at 10:22 PM

  3. Any chance of him backing single payer health care?


    September 27, 2015 at 10:25 PM

    • No — Single Payer like the NHS is not really a good system (although better than what the US has now). No — Trump will propose a universal system with the poor covered by the government and the rest in private competitive insurance. Ideally there would be price transparency so people can shop around. This is the system they have in Belgium and Switzerland for example. There are no waiting times for surgery since surgeons want to get paid — unlike in a single payer system, where surgeons are just paid employees.

      Haven Monahan

      September 28, 2015 at 7:10 AM

      • Having the doctors actually be government employees, NHS style, is actually an outlier on how these things are done. Its more common for the government to run a public health insurance scheme (alongside private insurance carriers, by the way), as in Canada, or to essentially turn the insurance companies into utilities, as on the European continent.

        For the US I actually favor the Canadian model precisely because I think the transition will be easier. Canada has public health insurance, called Medicare, that covers everyone. There are some gaps in coverage that private insurers fill. The US has public health insurance, called Medicare, that covers only old people. There are some gaps in coverage that private insurers fill. You just keep on increasing who gets covered by Medicare. There is probably some gold plating that can be afforded when it just covers seniors that will have to be cut as it covers everyone, but the principle is simple enough.

        The US has regulated utilities of course, but there is simply no experience with doing this with health care, and I can imagine all sorts of rent seeking and corruption that would go into the effort. Actually the US even runs a NHS style health care system, the VA, but to do the utilities model would be reinventing the wheel.


        September 28, 2015 at 1:10 PM

  4. Most hedge funds do trade more often than once a year in a particular instrument. You can’t charge much performance fee for buying and holding. If you come in and out within a year, then it’s short term capital gains, which is actually right now worse than regular income (due to Obamacare extra 3.8% tax on any capital gains). So in reality some change along these lines will lower the tax on some hedge fund managers. PE funds tend to be all cap gains, and they will be hit. Mutual funds don’t charge performance fees, and neither are some big “hedge funds” that are tilting around s&p, selling “smart” beta.


    September 27, 2015 at 10:33 PM

  5. He should come out opposed to affirmative action. It’s a position that is broadly popular, fundamentally republican, and something that noone else is making an issue of. It’s just like his stance on immigration.

    His tax plan may not be crazy republican extremism but it’s probably going to be worse than every single democratic candidates tax plan.

    Lloyd Llewellyn

    September 28, 2015 at 12:17 AM

    • I’d rather he didn’t because IMO he would taint the court’s thinking when they hear Fisher II this term. I think the court already has 5 votes to strike down AA, atleast for public schools.


      September 28, 2015 at 2:17 PM

      • That is a good reason, but another is that current polling has Trump winning 25% of the Black vote; unprecedented for the past few decades. Since Affirmative Action is still popular among African Americans (even though White women are the big winners), I agree it’s better to let that run through the courts for now.

        Mike Street Station

        September 28, 2015 at 5:44 PM

      • Relying on blacks for votes and on the courts to strike down affirmative action are both bad strategies. They’re both unlikely to happen. Trump isn’t going to get 25% of the black vote (he’s probably not even going to be the republican nominee). Similarly the court is unlikely to strike down anything and even if they do affirmative action will just be reincarnated as some new process with a new name that ends up working the same way as before. They’re also both terrible long term strategies for doing all the other work that needs to be done. Black interests are fundamentally at odds with white interests and with the interests of the country. And getting the courts to overturn existing precedents is a very slow, very risky, and very undemocratic way to bring about reform.

        Lloyd Llewellyn

        September 29, 2015 at 2:21 AM

      • “he’s probably not even going to be the republican nominee”

        He has been leading in the polls for three months, and the voters really don’t like Jeb Bush who is supposed to be the front runner.

        Lion of the Blogosphere

        September 29, 2015 at 8:52 AM

  6. In France, sales tax is much more productive than income tax (not corporate tax). It would be really effective to higher sales tax and inheritance and donation tax, lower corportate tax and supress income tax (on people income only, not partnership etc. ).

    Bruno from Paris, France.

    September 28, 2015 at 3:28 AM

  7. A lot of Trump’s tax plan will concern tariffs and trade protection through tax. And this is a good thing — free trade is just as disastrous as open borders.

    Haven Monahan

    September 28, 2015 at 7:11 AM

  8. If this country was sane, the position of all presidential candidates would be that its Congress’ job to figure out how much taxes to raise, and in what mix. The “tax plan” would be to veto anything that went overboard in favors to special interests, raised too much in taxes, raised too little (and left too much to borrowing), or socked it to only a few groups in society.

    Nineteenth century presidential candidates did talk alot about tariffs, so its probably OK for a presidential candidate to talk up raising more revenue for the government through tariffs.


    September 28, 2015 at 10:19 AM

  9. Trump poisoning the well for all the other GOP candidates. When the Trump bubble pops the nominee is going to be saddled with Trump sound bites about a millionaire tax that does nothing but prevent small business owners competing with the real rich guys.

    It would be nice if his plan targets idiot celebrities who make windfall sums based on no value to the economy but that would be too much to hope for.

    If Jay Z and Jennifer Laurence got a tax surcharge that would have no impact on the economy.

    cluster of grapes

    September 28, 2015 at 10:24 AM

  10. Lion, what is your beef with a national sales tax? Here in Florida we are able to avoid a state income tax due to our sales tax, but tourism dollars are a big reason for that. The Fair Tax proposal (which I know you hate) did not seem to be as progressive as an income tax plan could be, but it still collects dollars from those that do not report income (tourists, illegal aliens, criminals).

    Can you give a quick breakdown of what you do not like (or think is stupid) about a national sales tax, vice income tax?


    September 28, 2015 at 10:38 AM

    • Any national sales tax that replaces income and other taxes will be substantially higher than Florida (6%) or other state taxes. It is estimated the rate to replace existing taxes would be 20-30% depending if food and other common exemptions aren’t taxed and as most states have a sales tax of about 10% the effective rate for most goods is likely to reach 40%. Bearing in mind that this is just to replace existing taxes and not close the deficit you could argue that the rate may even need to be higher.

      Click to access NationalSalesorValue-addedTax.pdf

      With the thoughts you'd be thinkin

      September 28, 2015 at 1:26 PM

    • There is a good point in that Florida has a nice situation where lots of people want to visit Florida, so they can get people from out of state to pay for much of the state government, and then they can get rid of their income tax and get a lot of retired people to move to Florida and they will spend their money in the state.

      People criticize the high New York state income tax, but there is actually an analogous situation there. Enough wealthy people are going to be doing business in New York city or living there that you can soak them more than most states. Relatively high taxes that New York City and its suburbs can absorb may well be hurting upstate, however.


      September 28, 2015 at 1:29 PM

  11. @lotb

    ot, re:

    flight 4u9525, andreas lubitz, antidepressants

    (in english)


    September 28, 2015 at 11:28 AM

    • A cause an effect reversal. Drugs are only given to people who have mental problems in the first place, and it’s the underlying mental problems which cause people to do stuff which sane people don’t do. That’s like saying that chemotherapy causes cancer because everyone taking chemotherapy drugs has cancer.

      Lion of the Blogosphere

      September 28, 2015 at 12:11 PM

      • Exactly, thank you Lion.

        Now every drug given for depression now comes with a disclaimer “may cause suicide.” Why anyone would try to develop drugs to treat depression in this climate is beyond me.


        September 28, 2015 at 2:01 PM

      • Its perfectly possible for a drug meant to treat one symptom or disorder to exacerbate it or to cause an entirely new related symptom or disorder.

        The idea that drug companies don’t benefit from an extraordinarily favorable regulations regime is ridiculous and absurd. They are the most profitable industry and could easily be made the least by tweaking any number of totally arbitrary elements of regulation e.g. patent lengths.

        Lloyd Llewellyn

        September 29, 2015 at 2:27 AM

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