What Is the Donald Trump Tax Plan and What Would it Mean For You?

Image source: Flickr

This morning Donald Trump announced his plan to reform the tax code. The plan cuts rates across the board, similar to the Jeb Bush plan. The plan to pay for this is to cut out loopholes and cap deductions similar to what was done in the 80's. Those earning less than 25,000 will pay no tax at all. For 31 million Americans, they would pay no tax. For the top bracket they would see a tax cut from 39.6% to 25%. The corporate tax rate would be decreased from 35% to 15%.

Trump's plan for the rest of the tax brackets starts with the lowest bracket of 10 percent and would apply to income from the $50,000 - $100,000 range for a married couple. The next bracket is set at 20 percent and  would apply to married couples earning more than $100,000. The plan aims to eliminate the alternative minimum tax and would slash the highest capital gains rate to 20 percent from the current 23.8 percent. Contrary to what he seems to think, this plan would be a massive tax cut for the richest individuals in our country.

Contrary to popular belief the U.S. has one of the most progressive tax codes in the world. more than 40% of Americans pay no federal income tax at all under the current plan so this would not really be any change for them, but it sounds great on the stump. Instead of such high marginal rates,  most other countries use a form of a consumption tax, otherwise known as a VAT. A VAT is basically a sales tax on all new goods.

It would also cut the rate at which overseas profits are returned to the U.S. to 10%. This has been a popular idea that House Republicans have been in favor of for years, and may even include in the Highway Trust Fund talks.

While Trump claims that his plan won't increase the deficit, one might wonder if the increase to hedge funds along with the cuts in overseas taxes, loopholes and deductions will be enough to equal his spending ideas. Trump's immigration plan alone would cost hundreds of billions of dollars and have a negative impact on the economy of over $1.7 trillion.

Last night when he outlined the basics of a healthcare plan he outlined a massive medicaid expansion. It is already anticipated that Medicaid will cost our country $100 billion per year by 2020. If he's not cutting entitlements, then where are his spending cuts coming? He's not planning on cutting military spending, so where is he supposed to make up the difference?

Why is it important to cut the deficit? If these cuts and reductions are not enough, it will only add to our massive $18.4 trillion debt. For reference that's equal to 154,000 per tax payer.

From what we have seen, the Trump tax plan coupled with his spending plans would mean massive deficits. Even with all deductions removed and all loopholes closed (which is not what Trump is suggesting) we would likely widen our deficit with this plan. In fact most experts are saying it would be almost impossible to be revenue neutral with this plan.
While there would certainly be increased  benefits to individuals with this plan and growth to the economy, most estimates believe it would cost us hundreds of billions in lost revenue yearly. It is impossible to have continuous growth, and at some point we would see another recession, and more than likely it will be during the next 4 years statistically speaking . When that hits you can guarantee revenues would plunge and deficits would grow massively.

Nothing in the Donald Trump plan is new. His tax cuts and loophole reductions are almost identical to those proposed by Bush, his overseas profits plan has been around for years. In such a highly touted tax plan that was supposed to be tough on taxes, this plan is one of the weakest attempts that Donald Trump has put out there to reform anything.

Fact Check: 'Illegal Alien Facts'

I've run across this picture posted on Facebook a half dozen times now, and I wanted to do a little research to fact check it's claims. Many Americans have the impression that most illegal immigrants are here just to live off our welfare system. So I wanted to check, are these "facts" true?

The first fact claims that more than 43% of all food stamps are given to illegals. According to estimates by Pew Research Center, there are currently 11.3 million illegal immigrants in the U.S., which has stabilized after decades of massive growth. According to the Department of Agriculture, 46.5 million Americans are on food stamps. Right there we can easily see that the first claim cannot possibly be true. Mathematically there aren't enough illegal immigrants in the U.S. to equal 43% of food stamp users.

On the claim that 95% of warrants for murder in Los Angelos are for illegal immigrants, several groups have fact checked this claim and found it to be only half true. Illegal immigrants are more likely to flee jurisdiction before being arrested, so warrants would remain open indefinitely but we don't have accurate statistics on what the most recent data is.

The next claim is that less than 2 percent of illegals are picking crops, but 41 percent are on welfare. Politifact found this claim to be mostly false. While only 2 percent of illegals are involved in picking crops according to a 2007 report, it is far from reasonable to even consider that as many as 41% are on welfare. Politifact continues:

"According to a 2007 report by the Center for Immigration Studies, a group that favors stricter immigration laws, 40 percent of illegal immigrant-headed households used any "major welfare" program in the previous calendar year.
   
But it’s important to keep two bits of context in mind:
   
• This statistic addresses households headed by an illegal immigrant. However, many of these households include American citizens within the family, often children who were born in the United States and who received citizenship at birth. Indeed, given the web of restrictions on the granting of government benefits to illegal immigrants, most of the "welfare" benefits being counted in the CIS table are going to citizen children, not to adult illegal immigrants.
   
• We suspect that when many people hear the term "welfare," they think of cash benefits. However, very little cash assistance is going to illegal immigrants. According to CIS, less than 1 percent of illegal-immigrant-headed households included anyone receiving direct government cash assistance, such as Temporary Aid for Needy Families (TANF), Supplemental Security Income (SSI) or state-run cash aid. This is not surprising: Illegal immigrants are generally barred from receiving such payments.
   
Instead, 27 percent of such households received coverage from Medicaid, the federal-state health care program for the poor, while 33 percent received food assistance, such as free or reduced-price school lunches, food stamps, or benefits from the Women-Infants-Children program (WIC). As noted earlier, many of the recipients of these programs were actually citizen children of illegal immigrants."

The next claim is that 2/3 of all births in California are to illegals on Medi-Cal. This was found to be a false skewing of data which focused just on Los Angelos and included all births to hispanics.

Number five says that nearly 60% of all occupants of HUD properties in U.S. are illegals. Politifact found that "The closest but unverified estimate we could find for illegal occupants in HUD housing is less than 1 percent nationwide. The claim of 60 percent is ridiculously false."

Next we look at whether more than 39% of California students grades 1-12 are illegals. A Center for Immigration Studies report (2011) gives the percentage of school age “illegal and U.S. born children of illegals” in California as 14%. The math on this one just does not add up, and is rated false.

The post claims 75% of LA’s Most Wanted are illegals. According to the LA Times (to which many of these facts were first falsely attributed), the LAPD, states this is simply not true.

More than half of all gang members are illegals. This one seems to come from a 2008 study funded by the Justice Department. The Center for Immigration Studies found that 25 to 50 percent of gang members arrested in northern and western Virginia were removable, and usually illegal aliens. We simply do not have the data available to determine the validity of this claim. However since there are around 1.4 million gang members in the U.S, it seems unlikely that the claim would hold up nationwide.

US companies using illegals in 2005 profited over 2.36 trillion dollars. The total U.S. economic output in 2014 was just over 17 trillion dollars. While illegals do make up 5.1% of the U.S. labor force, it seems unlikely that they would drive that much economic growth. Legally however, companies are required to check to see if their workers are here legally.

US Taxpayers are footing the bill for ALL illegals. Currently 43% of all Americans aren't paying federal taxes, but all of us (illegals included) are paying taxes. We all pay sales tax, and if we own property we pay property tax, (even if we're renting, our landlords pay property tax). I'm sure many illegal immigrants would love to be here legally and wouldn't mind paying back taxes just to have that right.

Overall this internet meme is rated false. Some of the claims have half truths. Others were flat-out lies. If you see your friends post this meme, please refer them to this article.

Why I Take the Donald Trump Campaign Seriously, and You Should Too.

In the past few months we have begun the search for the next President of the United States of America. This year and a half process of deciding who will be given enormous amounts of power over human life in this country cannot be taken lightly. Who we decide to elect president will most likely have a wide range of impacts, from supreme court nominees, to military conflicts, to economic affairs. Each citizen has been given the right to vote, to help decide who that person should be. This right should never be taken lightly, as generations have fought so all may have and retain it.

Many have deemed the democratic nomination to be a shoo in for Hilary Clinton, most are not considering any other candidates for nomination. On the other side, 16 republicans have announced their candidacy. Of these 16 -which includes several governors with exceptional records, and several senators- Donald Trump is the current front runner for the republican nomination. Though many people have thought his whole presidential campaign is nothing more than a publicity stunt, many people are taking him seriously as a candidate. While I support his right to run, I am concerned with why people support him.

My recent experience with Trump supporters has made me question whether or not they even know where he stands on the issues, or if they are more anti-establishment, anti-Washington, and anti-political correctness. Trump is known for his brash talk with bold statements on issues such as immigration and veterans. He has attacked establishment mainstays like John McCain and Lindsay Graham in sometimes sophomoric ways leading many to call for apologies which never came.

Some people appreciate that unapologetic personality and think that kind of attitude is what we need to have in Washington leading our country. Others say the reason they support Trump because you know he'll do what he says. Many have told me it is because he has been such a successful businessman that we need someone who understands business in the white house. 

Those I have come in contact with have no idea where he sits on most issues aside from immigration. So where does Donald Trump stand on the issues?

Speaking about healthcare he said: "It is an unacceptable but accurate fact that the number of uninsured Americans has risen to 42 million. Working out detailed plans will take time. But the goal should be clear: Our people are our greatest asset. We must take care of our own. We must have universal healthcare."

On gun control: "I support the ban on assault weapons and I support a slightly longer waiting period to purchase a gun."

On tax reform: "If we want jobs in America, we need to enact my 5-part tax policy: kill the death tax; lower the tax rates on capital gains & dividends; eliminate corporate taxes in order to create more American jobs; mandate a 15% tax for outsourcing jobs and a 20% tax for importing goods, and enact the 1-5-10-15 income tax plan [four brackets with a top rate of 15%]."

Now he has many more stances on many more issues including abortion, education, etc. Sometimes he has stayed steady, sometimes he has flip flopped. If you are considering supporting him, please read up on what he has said over the years on the issues.

For those who are supporting him because they think he'll be outspoken and unapologetic in the White House, I would like to point you to our current president. No matter what has happened, he has been unapologetic: Benghazi, Fast and Furious, IRS, VA, the Middle East, etc. That is not how you heal America, that is how you divide it further. We need less divisiveness and more compromise among our nation's leaders.

For those who say that they support Trump because - as one person put it - "at least you know what you will get with him, or do you want some one like we have now who says what you wanna hear then does nothing?" My response is that no candidate will ever be perfect on doing everything he says he will do - that is the reality of the presidency.

Sometimes they realize they don't have the authority to do those things, often they realize there are reasons for that, and lastly we are electing a president with constitutionally limited powers, not a king. Even if Donald Trump is elected president, he won't, and can't do all of the things he claims he would do. Some of those things are not within the powers of the president to enact.

We can only consider what he has said in the past, because we have no true political record of how he would act to follow. I say this because, when considering his record, you have to consider: what record does Donald Trump have of accomplishing anything without having either a contractual obligation or a monetary incentive to accomplish it? As president he will have neither.

The real reason why he's getting a boost right now is more than likely a disgruntled GOP electorate. Early polls are no guarantee who will be the nominee by far. At this point four years ago Rick Santorum was leading in the polls. As the debates near, I encourage you to consider every candidate just as I will, where they stand on the issues now, and what they have accomplished in the past.

Please read what each candidate has done, what they say and think about what is best for all of America. This is not a time to rush onto a bandwagon because a candidate is bold or is popular. This is the time to contemplate the future of America and who we think will be best to lead it. 

You are still  allowed to support Donald Trump, but I ask that you consider all of the candidates as well. Read about them and where they are on the issues, what they have done with their time in the private sector and in office. Please take your duty as a citizen of this great nation seriously.