Donald Trump is a master salesman. And he creates his own reality. So if he tells you, "This is a middle-class tax cut, and I, Donald Trump, won't benefit," he expects you to believe that. It doesn't matter that it's not true. It's he said it, you're supposed to believe it. And that's how he's run his entire administration. If he says it, that makes it true.
David Cay JohnstonWhat the Trump tax plan is a plan to give tiny little tax cuts to most Americans, raise taxes on perhaps one in five families and shower benefits on people who earn millions of dollars a year. And this fits with a fundamental principle the Republicans have been pursuing for a long time. The rich aren't investing and creating jobs, because they don't have nearly enough money, and so we need to get them money. And the way the Republicans want to get it to them is tax cuts first, and then to take away help for children, the disabled, the elderly and the poor.
David Cay JohnstonOne of the tax systems in the US is for wage earners. The government takes money from them out of each paycheck - so it knows how much they make, and those workers can't cheat to any significant degree. But the other tax system is for capital. Those with capital get to tell the government what they want to tell. They may get audited, but if their tax returns are of any size the government doesn't have enough of the smart auditors to figure out what's really going on. And there are the rules that allow you to do things like take in money today and pay taxes on it thirty years from now.
David Cay JohnstonWhen you say the tax system benefits the rich, there are a lot of people who respond, "That can't be true, look at the rate of tax. The people who are rich pay a higher rate than you or I." Well, yeah, but if you don't have to pay taxes on a lot of your income, then your real tax rate is a lot lower. And if you're allowed to pay your taxes thirty years from now instead of today then you're a lot better off. People need to have a sophisticated understanding of how the system works to appreciate that the posted tax rate really has very little to do with the taxes people pay.
David Cay JohnstonDonald Trump ran for office complaining that at $19 trillion, the US debt was completely out of control, and yet what he's planning to do is throw trillions of dollars more onto that debt. If the proposed tax plan cuts upon the wealthiest Americans is enacted, 10 years from now America's debt will be over $30 trillion. And so, he's contradicting, his own stated positions. And that's because, to Donald, none of this is about policy. It's not about sound economics. It's about greed and the glorification of the great leader.
David Cay Johnston