Posts Tagged ‘Tax Foundation’

Tax evader, faux philanthropist, unsuccessful businessman: Reviewing Trump’s qualifications to serve as president

October 7, 2016

By Matthew E. Milliken
MEMwrites.wordpress.com
Oct. 7, 2016

In a little more than four weeks, Americans will choose the 45th president of the United States of America. I am, frankly, not wild about the Democratic Party’s nominee, Hillary Clinton, for whom I did not vote in the North Carolina primary election. But as regular readers will know, I have no love or respect for Donald Trump.

But even though I feel somewhat jaded about this presidential contest, every few days, at least one or two items come out — usually because Trump has done or said something outrageous or because reporters have uncovered one of Trump’s past exploits — that leave me astonished that the Republican Party decided Trump was a fitting candidate to lead the free world.

Here’s a recap from the past few days, mainly prompted by The New York Times’s receipt of leaked partial tax returns. The documents showed that Trump declared a loss on his 1995 income tax returns that was large enough to exempt him from paying federal taxes for 18 years.

Trump took advantage of loopholes that, while legal, are available mainly to people who are rich or who develop real estate or both. It’s long been suspected that Trump has evaded a great deal of tax liability, but the Times story lent additional credence to that notion.

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Dynamic scoring, sobering results: More on the Tax Foundation’s analysis of GOP candidates’ tax plans

November 14, 2015

By Matthew E. Milliken
MEMwrites.wordpress.com
Nov. 14, 2015

Recently, I performed some sophisticated data crunching on a Tax Foundation analysis of the tax-reform plans of seven Republican presidential candidates. (Which is to say, I typed the data from this Tax Foundation table into a spreadsheet and divided certain numbers by 10.) After comparing the results to historic U.S. budget deficits, I concluded that:

[A]ll of these tax proposals would be budget busters, creating some of the largest annual deficits in U.S. history. If enacted, and if they worked as projected, either government services would have to be cut dramatically or tax rates would have to be increased in order to prevent the national debt from ballooning. And given the political scene, the former option would be far more likely to be enacted.

However, there’s a catch.

The catch is that the Tax Foundation projected potential budget surpluses or deficits for the Republican proposals using two different methods. The numbers I relayed in my previous post were produced using static revenue estimates, a technique that has long been employed by government budget analysts.

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U.S. budget deficits: Numbers past, present and future

November 12, 2015

By Matthew E. Milliken
MEMwrites.wordpress.com
Nov. 12, 2015

Earlier this week, I wrote about an analysis from the Tax Foundation that indicated that the tax-reform plans of seven Republican candidates each might increase the deficit by more than a trillion of dollars over a 10-year period. I want to explore the details a little further.

Allow me to set the stage with a brief history of federal budget deficits. The first time the U.S. budget was in the red for more than $75 billion was in fiscal year 1981, when it hit $79 billion under a plan enacted in what turned out to be the last year of Jimmy Carter’s presidency. The first time the federal deficit exceeded $100 billion was the very next year, under Ronald Reagan, when it reached $128 billion. Between 1983 and 1995, the budgetary gap ranged from a low of roughly $150 billion to a high of $290 billion.

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Deficits as far as the eye can see: An overview of the Republican presidential candidates’ tax plans

November 11, 2015

By Matthew E. Milliken
MEMwrites.wordpress.com
Nov. 11, 2015

Last month, I examined a common theme in the tax reform plans of seemingly every Republican presidential candidate: The notion that, as Donald Trump’s tax plan states, massive tax cuts for the rich can be “fully paid for by…[r]educing or eliminating most deductions and loopholes available to the very rich.”

I criticized this idea on the grounds that removing a wide swath of deductions and loopholes (part of a budget category that policy wonks call “tax expenditures”) is extremely difficult to do. Some of these expenditures, such as the mortgage-interest deduction for home purchasers, are widely popular, even though they do little to promote their intended policy goals. And some of these expenditures have the backing of interest groups that routinely spend hundreds of millions of dollars annually on lobbying, political contributions and the like.

My fear is that our next Republican president might (read: would) prioritize implementing their program of tax-rate reductions over enacting the reduction and reform of tax expenditures. That, of course, would produce a fundamentally untenable budget situation, one where the revenue loss from tax cuts would not be zeroed out by voiding tax expenditures. In this scenario, the United States would face a significant built-in annual deficit.

The ultimate result, of course, would almost certainly be radical cutbacks in government services — unless Congress and the president agreed to hike tax rates substantially. But that’s hard to do even when the two major political parties don’t have ideological differences as deep as they’ve become in the early 21st century.

I stand by what I wrote. However, I must confess that my earlier post ignored the real issue.

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