DONALD TRUMP: LIES, LIES & MORE LIES!

…President Trump telling another falsehood.

 

WAPO Fact Checkers say that if people believe the president, they have bridge in Brooklyn to sell them.

 

In a speech in Saint Charles, Missouri, just outside St Louis, Donald Trump told another lie that the Washington Post Fact Checkers immediately awarded him Four Pinocchio’s.

Here’s the lie: “This [tax reform] is going to cost me a fortune, this thing, believe me, believe me. This is not good for me. . . . I think my accountants are going crazy right now.”

 

The Fact Checkers have now decided that when they do a fact check on the president, it is important that they fully explain just why they have decided to assign all their Pinocchio’s.

 

With that in mind, here’s why that Trump lie, that he continues to repeat was a whopper.  As per the Fact Checkers: “If anyone believes the president on this, we have a bridge in Brooklyn available for them to purchase.”

Since the president reneged on his promise to release his taxes, the Fact Checkers had to take Trump’s 2005 taxes that were leaked, and then do their own analysis.  The White House has confirmed that the bottom-line numbers of the 2005 return were correct.

Based on those bottom-line numbers, and the statement from the non-partisan Tax Policy Center, 70% of the tax payers in the top 0.1%, which is where the president would be, they will get a major tax cut under either the House Bill or the Senate Bill.

 

Because there are differences between the House and Senate Bills, here’s the actual impact on the president’s finances.

 

·       Both bills would repeal the alternative minimum tax, which is designed to make sure that the wealthy pay at least some tax. Trump’s 2005 return shows that the AMT increased Trump’s tax bill from about $5.3 million to $36.5 million. So at least back in that tax year, he potentially could have saved $31 million if it had been repealed. The capital gains tax for people in Trump’s income bracket was increased since then, so the savings would be somewhat lower now.

 

·       The House bill would dramatically slash taxes from a top rate of 39.6% to 25% on “pass-through” entities, which are companies that direct income through the individual income tax code and not the corporate tax code. The Senate bill currently is less generous, allowing a deduction of 17.4 percent of their income from taxable income, but lawmakers are discussing increasing the deduction to 20%, which would increase the benefit to Trump.  Effectively, this would be akin to a 30.8 percent top tax rate.

 

Trump’s 2005 tax return showed that he had more than $109 million in income from businesses, partnerships and pass-through entities, which represented a large portion of his income. A letter by Trump’s tax lawyers released by the Trump campaign stated that he was the sole or principal owner in about 500 entities, “almost exclusively through sole proprietorships and/or closely held partnerships.”  So the House version of the tax bill in theory could cut the taxes on that much pass-through income by as much as $16 million, though in 2005 a lot of that income was offset by business losses. The Senate version of the bill could have cut the tax bill by about $9 million.

 

While the bills purport to close loopholes, there are provisions that offer better deals for real estate investors. The impact of these provisions is unclear, but it certainly raises an eyebrow.

 

“In terms of those pass-through entities, there are anti-abuse rules to make sure that wages do not avoid the top two tax rates of 35% and 39.6%,” a White House official said. “It ensures that tax relief is targeted to Main Street job creators and not wealthy individuals.”

 

·       The House bill does not reduce the top Income Tax Rate, but the Senate Bill offers a small reduction to 38.5%. The other rate changes would make only a modest difference to Trump, who at least in 2005 earned about $10.8 million from wages, interest and dividends. Under the Senate bill, he would see a reduction of about $100,000.

 

·       Here’s one area where Trump’s taxes would increase because the bills would eliminate the deductibility of state and local taxes. The House would still allow a deduction of $10,000 for property taxes, but that’s a pittance for Trump’s properties.

 

·       Here’s where Trump’s taxes might increase.  The mortgage and charitable deductions are relatively untouched, but the House bill would reduce the cap on the size of new mortgages from $1 million to $500,000.  If it is assumed that roughly three-quarters of Trump’s itemized deductions were from state and local taxes, so his tax bill would increase in taxes by $5 million.  So, once again he told a lie because he said the tax plan would not affect his taxes.  This time they would be increased.

 

·       I must also include the impact of the possible repeal of the estate tax on the Trump family. While Trump would not personally benefit, it could make a big difference to his children.

 

The House Bill  would completely repeal the estate tax, even eliminating any tax on capital gains. The Bloomberg Billionaires Index says Trump is worth $2.86 billion, so at a 40% tax rate, that would be a savings of $1.1 billion.  That is only If you believe Trump’s highly questionable claim that he’s worth $10 billion.  That would be a savings of $4 billion.  The Senate Bill would only increase the amount of estate exempt from taxation, from about $11 million for couples to $22 million. That would still save the Trump heirs about $4 million.

 

Summary:

 

When one adds it up, Trump would have saved $42 million on his 2005 taxes under today’s House bill and $35.1 million under the Senate bill.  A big part of the savings is from elimination of the alternative minimum tax.  Of course we do not know how often he was subjected to it.

 

The fact is that the president has refused to release his tax returns, and this should not allow him to make claims about his taxes without offering some documented proof. The only information we do have is the partial 2005 return, and that shows that his claim of losing a fortune on the proposed tax bills is total B.S..

Copyright G.Ater  2017