Trump Could Cash In On His Own Tax Plan
The administration wanted to focus on the outline of his tax plan, but instead it was inundated with questions about the president’s still-unreleased taxes.
A White House tax reform blueprint released on Wednesday would have saved President Donald Trump tens of millions of dollars in 2005.
The plan proposes the elimination of the Alternative Minimum Tax, which imposed a $31 million tax obligation on Trump in 2005, according to a leaked copy of his tax returns for that year. Absent the AMT, he would have paid $5.3 million in federal income taxes on more than $150 million income, a rate of just 3.5 percent.
How much is could save him, his company or his family down the road is a mystery, since Trump refuses to release his tax returns - an issue that reemerged on Wednesday at the White House as the administration rolled out their first attempt at tax reform.
Treasury Secretary Steve Mnuchin and White House National Economic Director Gary Cohn were repeatedly asked at a Wednesday press briefing whether the proposal would reduce the tax burdens or Trump, his family, or his company. They declined to answer directly.
“I can’t comment on the president’s tax situation since I don’t have access to that,” Mnuchin said. Asked whether the administration would make that information publicly available, he reiterated the White House’s longstanding refusal to release Trump’s tax returns.
“The president has released plenty of info and has given more financial disclosure than anybody else,” Mnuchin said. “I think the american population has plenty of information.”
In fact, every president since Richard Nixon has released information on his personal tax situation and although the White House has suggested that Trump hasn’t released tax returns due to an ongoing audit, federal law requires annual IRS audits of every sitting president.
The AMT, a version of which first went into effect in 1970, is designed to ensure that wealthy taxpayers are not able to eliminate their federal income tax burdens through deductions and other offsets. Without additional information on Trump’s more recent income tax payments, it is impossible to know whether eliminating it would reduce his payments to the Treasury.
That uncertainty, and others related to Trump’s still mysterious finances, could be a sticking point among congressional Democrats, who have criticized Trump since the campaign for failing to release additional information on his income and tax situation.
Senate Minority Whip Dick Durbin, the chamber’s second-ranking Democrat, hinted at that line of attack on Trump’s tax plan shortly after Cohn and Mnuchin spoke. “President Trump should release his own tax returns if he wants to have any credibility in a debate about America’s tax code,” Durbin wrote on Twitter..
The meat of the proposal is a reduction in rates across the board. It would bring down the corporate income tax rate to 15%, create three personal income tax brackets of 10%, 25%, and 35%, and double the standard income tax deduction. Mnuchin and Cohn said the plan would mean a tax cut for middle class families.
But both pointed to its elimination of numerous tax deductions to suggest that effective tax rates for higher-income individuals such as Trump might not be so heavily reduced, though they did not say that wealthier people would see a net increase in their tax bills.
The elimination of those deductions could also be crucial to winning the support of congressional Republicans, many of whom would rather see a tax plan that does not add to the federal budget deficit.
Mnuchin maintained that the plan would be revenue-neutral. It “will pay for itself with growth and with reduction of different deductions and closing loopholes,” he said.
Republican leadership praised the plan after its release, but suggested that it will only be the starting point in negotiations over a package of reforms to the tax code.
In a joint statement, Speaker Paul Ryan, Senate Majority Leader Mitch McConnell, and the chairs of the House Ways and Means and Senate Finance committees said the plan provides “critical guideposts” as Congress hammers out legislation.