How tax reform benefits Trump

The White House announced a sweeping plan to cut a variety of taxes that would overwhelmingly benefit the wealthy.

“I don’t benefit. I don’t benefit” Donald Trump said. “In fact, very, very strongly, as you see, I think there’s very little benefit for people of wealth.”

And yet he will greatly. According to a New York Times analysis using his 2005 tax return [the one that was leaked and showed him to be worth about $2.86 billion], they discovered that he’d save over $1 billion a year in taxes. This also includes:

  • If his assets — reportedly valued at $2.86 billion — were transferred after his death under today’s rules, his estate would be taxed at about 40 per cent. Repealing the federal estate tax could save his family about $1.1 billion, though it could still be subject to New York estate taxes.
  • The decades-old alternative minimum tax is meant to prevent America’s wealthiest from using deductions to pay very low or no federal income tax. In 2005, it accounted for about 80 per cent of Trump’s overall income tax payment. His plan to repeal the tax would save him $31.3 million.
  • Individuals could qualify for a significantly reduced tax rate of 25 per cent on certain types of income they receive through business partnerships and similar entities. That is up from the original proposal in April of 15 per cent, but far lower than the top tax rates currently faced by high-income earners of 39.6 per cent. Trump could save as much as $6.2 million on business income and $9.8 million on income from real estate and other kinds of partnerships under this plan, compared with his tax burden under current law.
  • The proposal to reduce the highest tax rate to 35 per cent from 39.6 per cent would save high-income earners similar to Trump a relatively small amount compared with the repeal of the alternative minimum tax. The $500,000 in savings is a rough estimate because Trump has not specified income levels for his proposed tax brackets.

 

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