Skip to main content

Sign up for our newsletter.

Quality journalism. Progressive values. Direct to your inbox.

Republican presidential candidate Donald Trump holds up his notes as he speaks at a luncheon for the Economic Club of New York in New York, Thursday, Sept. 15, 2016. (Photo: AP/Seth Wenig)

6 Worst Things About Trump Tax Plan

If Congress takes up tax reform in early 2017, the White House will push cuts that would benefit the wealthy, including the president-elect himself and his family members.

Frank Clemente


On the campaign trail, Donald Trump promised the biggest tax cuts since the Reagan era and proposed reforms that would drastically increase our country’s already extreme levels of inequality. Now theRepublican-controlled Congress is considering ramming through tax reforms in the first half of 2017, using a “fast-pass” process called reconciliation that requires just 51 votes in the senate. If Trump’s plan becomes the blueprint for this reform, these would be the six worst features.

1. Gives huge tax breaks to the rich and corporations, loses $6.2 trillion over 10 yearsand if paid for will require deep cuts to domestic services. Three-quarters of lost revenues are from corporate and business tax breaks largely benefiting the rich. The top 0.1 percent of households, which includes Trump’s, will get an annual tax cut of about $1.1 million each. Nearly half (47 percent) of the tax cuts will go to the top 1 percent of households; each one will get an average tax break of nearly $215,000 a year. The bottom 20 percent will get a tax cut of $110. Trump’s plan will increase the deficit by $7 trillion, unless massive cuts are made to benefits and services that working Americans depend on.

2. Slashes corporate tax rates by nearly 60 percent—from 35 percent to 15 percent — losing $2.6 trillion over 10 years. Corporations are already dodging their fair share of taxes at a time of record profits. Only $1 out of $9 of federal revenue now comes from corporate taxes. Sixty-five years ago, it was $1 out of every $3.

3. Gives multinational corporations with profits stashed offshore a tax cut of more than $550 billion. Big American corporations hold $2.5 trillion in earnings offshore on which they owe more than $700 billion in U.S. taxes. Trump would cut the tax rate on those offshore profits from 35 percent to just 10 percent on cash and only 4 percent on other assets, raising less than $150 billion. This would give tax-dodging multinational corporations an undeserved tax break of more than half a trillion dollars.

4. Increases taxes on nearly 9 million families while reducing the top tax rate on the wealthy from about 40 percent to 33 percent. Trump lowers and consolidates tax brackets, which would cost $1.5 trillion over 10 years.Even as taxes would decline a lot for the rich, they would increase for 8.7 million mostly low-and middle-income families with children, including more than half of single parents.

5. Cuts taxes on hedge funds and other “pass-through” businesses by $900 billion — personally benefiting Trump—and allows high-wage employees to dodge another $600 billion. Many Wall Street firms, law practices and other big-money outfits organize as partnerships or other business entities that allow them to pay their business taxes at individual rates. Trump would cut the tax rate on the owners of these so-called “pass-through entities” by as much as two-thirds, to just 15 percent. Owners of larger pass-throughs would be taxed at the dividend rate of 20 percent. These special low tax rates are expected to entice half of high-paid wage earners to call themselves contractors in order to be treated as pass-through entities. Trump is the sole or principal owner of 500 pass-through entities. He would personally benefit from this massive tax giveaway that’s been appropriately dubbed the “Trump Loophole.”

6. Eliminates the estate tax to boost the inheritances of millionaires and billionaires — which could give Trump’s heirs a tax break of billions of dollars. Trump would eliminate the federal estate tax, which is only paid by very wealthy families. Just one in 500 estates is affected today, those worth at least $5.5 million. The estate tax is a small curb on the accumulation of dynastic wealth and a key tool in reducing economic inequality. Eliminating the estate tax (while taxing capital gains of large estates at death, as Trump also proposes) would lose $174 billion over the next decade. Assuming Trump is worth the $10 billion he claims, his heirs could gain billions if his plan is adopted.

This work is licensed under a Creative Commons Attribution-Share Alike 3.0 License.

... We've had enough. The 1% own and operate the corporate media. They are doing everything they can to defend the status quo, squash dissent and protect the wealthy and the powerful. The Common Dreams media model is different. We cover the news that matters to the 99%. Our mission? To inform. To inspire. To ignite change for the common good. How? Nonprofit. Independent. Reader-supported. Free to read. Free to republish. Free to share. With no advertising. No paywalls. No selling of your data. Thousands of small donations fund our newsroom and allow us to continue publishing. Can you chip in? We can't do it without you. Thank you.

Critics Warn Biden 'Summit for Democracy' Will Highlight Democrats' Failures at Home

"President Biden can't champion democracy across the globe without fulfilling his promise to protect our voting rights at home."

Jessica Corbett ·

'Like a Teenager Promising to Clean Their Room in 30 Years': Biden Net-Zero Climate Goal for 2050 Ridiculed

"2050 is an extremely weak goal for the federal government to free itself from climate-heating pollution. It ignores existing technology and adds decades to GSA's own commitment to 100% renewable energy by 2025."

Brett Wilkins ·

Biden Should Cancel Student Debt or Watch $85 Billion Evaporate From US Economy: Analysis

Far-reaching cancellation enacted by Biden could add more than $173 billion to the nation's GDP in 2022 alone.

Kenny Stancil ·

Given Cover by Red-Baiting GOP, Corporate Dems Rebuked for Tanking Biden Nominee for Top Bank Regulator

"If you think that Senate Democrats rose up to [Republicans'] shameful display of modern McCarthyism by rallying around President Biden's nominee or her ideas that banking should work for the middle class, then you don't know the soul of today's Democratic Party," wrote one columnist.

Julia Conley ·

'S.O.S.!': Groups in Red States Nationwide Plead With Democrats to Pass Voting Rights Bill

"We can tell you firsthand that our Republican senators have no interest in joining this effort."

Jake Johnson ·

Support our work.

We are independent, non-profit, advertising-free and 100% reader supported.

Subscribe to our newsletter.

Quality journalism. Progressive values.
Direct to your inbox.

Subscribe to our Newsletter.

Common Dreams, Inc. Founded 1997. Registered 501(c3) Non-Profit | Privacy Policy
Common Dreams Logo