Wow, what a tax plan!
The plan is, essentially, not to collect any taxes but don't worry, all that wealth will trickle down and the bottom 99% will be so tired of winning they will say "Donald, please, we are tired of winning, make it stop." As I noted yesterday morning, it is a $4Tn givaway to the rich, not $2Tn and, now that we have more fact, the Federal Tax Policy Center says this plan will reduce Federal Revenues by $6.2 TRILLION over the next 10 years. That's $500Bn per year!
At our current rate of Government spending, that will put the US close to $30 TRILLION in debt if Trump lasts until 2025. The big changes revealed under the new program has several winners:
- Corporations – Taxes are cut from 35% to 15%.
- High-Income Earners – Top rate cut from 39.6% to 35% and 3.8% Obamacare surcharge removed.
- LLC Members – If you are in an LLC, your income will be taxed at just 15%
- Multimillionaires – Couples with estates over $11M and singles with $5.5M will no longer have to pay estate taxes (you know, family famers). This will save Trump's children about $1.5Bn when he dies.
- Tax avoiders – The AMT is being eliminated, now your accountant can get creative again.
And we get all that for just $6Tn – what could possibly go wrong? As I noted on Tuesday, $1.7Tn has already gone into the markets (on paper) and today we're closer to $2Tn in gains since the election at Dow 21,000 and, despite the fact that we're doing that on 10:1 leverage (to actual inflows), that will be counted as "economic growth" – even though it's nothing more than a gigantic bubble that is unlikely to have long-term support.
One way Trump is raising money to pay for all this winning is to elminate Teddy Roosevelt's "Antiquities Act", which has been used to protect million of acres of Government lands and monuments from developers and has, traditionally, always been EXPANDED by each President – until now. Now Trump will undo 100 years of conservation with a stroke of the pen, selling our parks to the highest bidder which, often as not, is a Trump-owned enterprise.