Analysis: Trump tax plan would cost at least $4.8T

Donald Trump’s revised tax plan would lower federal revenue by at least $4.8 trillion over a decade, and some low- and middle-income families would see their taxes increase under the proposal, an analysis released Monday by the liberal-leaning Citizens for Tax Justice (CTJ) found.

The Republican presidential nominee’s proposed cuts to individual income and payroll taxes would cost $2.1 trillion; his plans to cut corporate taxes would cost $2.4 trillion; and his plan to repeal the estate tax would cost $300 billion, according to the analysis.

{mosads}CTJ Director Bob McIntyre said that while Trump’s revised plan costs less than his original plan, “This new tax plan is in the same spirit as Trump’s initial proposal.

“He would cut taxes for the rich, cut taxes for businesses, provide minuscule tax cuts for lower-income groups, and then claim it’s a populist plan that helps working families.”

Trump’s revised plan, released earlier this month, would lower the top individual rate from 39.6 percent to 33 percent and the corporate tax rate from 35 percent to 15 percent. He would increase the standard deduction and create a new exemption for families with children ages 13 and under, but he would eliminate the current personal exemptions.

CTJ found that every income group would receive an overall tax cut under Trump’s plan. Taxpayers in the top 1 percent of income would receive an average tax cut of 5.1 percent of their income, while low- and middle-income taxpayers would see tax cuts averaging between 1.3 percent and 1.7 percent of their income.

However, some low- and middle-income families would receive tax increases under Trump’s plan because the bottom individual tax rate would increase from 10 percent to 12 percent and their taxable income might increase. Those who might see tax increases include childless couples who itemize their deductions and families with children over the age of 13, CTJ said. 

CTJ’s estimate did not factor in a rate reduction for “pass-through” businesses whose income is taxed through the individual code on their owners’ returns, since Trump “has provided incomplete and conflicting details on how this tax cut would be structured.” However, CTJ said that if Trump were to lower the rate for pass-through businesses to 15 percent, his plan would cost up to $1.6 trillion more.

CTJ analysts are not the first to suggest that Trump’s plan would increase taxes for some low- and middle-income families.

A report released over the weekend from Lily Batchelder, a New York University law professor, found that the plan would “significantly raise taxes for millions of low- and middle-income families with children, with especially large tax increases for working single parents.” The Washington Post reported that the Trump campaign took issue with Batchelder’s report.