The wide tax gulf between Romney and Trump
As anyone can attest, the 2016 presidential election is very different from the 2012 race. One less obvious contrast is between the tax plans of Mitt Romney, the GOP鈥檚 2012 standard-bearer, and Donald Trump, the party鈥檚 2016 candidate. There are some key design differences, but, for the most part, both would keep the basic framework of the current income tax. The gap is in scale. 聽
In 2012, the Tax Policy Center estimated that Romney鈥檚 plan would聽聽over ten years. That鈥檚 half the size of Trump鈥檚 plan, which TPC projects would聽聽over the next decade. 聽As my colleague Howard Gleckman聽, unless Trump is willing to make massive spending reductions, his tax cuts would result in an 鈥渋ncrease [of] the federal debt to levels never-before imagined.鈥� 聽聽聽聽聽
In 2012, Romney proposed reducing the corporate tax rate from 35 percent to 25 percent (with unspecified plans for additional corporate rate reductions in the future). By contrast, Trump would reduce the tax rate for all businesses (corporations and pass-throughs) to 15 percent.
It is a similar story with individual income taxes. In 2012, Romney聽聽in individual tax rates across all brackets, reducing the top rate to 28 percent. Trump would聽聽the current seven tax brackets into just three, with rates of 10, 20, and 25 percent, and nearly quadruple the standard deduction to $25,000 for single filers and $50,000 for married couples.
Taken superficially, some of Romney鈥檚 tax rates would have been lower than Trump鈥檚. For instance, Romney would have cut the current 10 percent聽bottom rate to 8 percent聽while Trump would leave it at 10 percent. But Trump鈥檚 large standard deduction would effectively cut the tax rate to zero for many low- and middle-income filers. Almost all the rest would claim the standard deduction and forgo itemization. Overall, his plan聽聽the percentage of people not paying income tax from聽to 63 percent.
As a whole, Trump鈥檚 tax plan would boost average after-tax incomes by 7.1 percent, compared to 5.8 percent under Romney鈥檚 plan. While Trump鈥檚 plan would be more generous throughout the income distribution, his largesse is especially noticeable at the very top. For example, TPC estimated that Romney would have raised the average after-tax incomes of the top 1 percent by聽, substantially less than the聽聽boost the Trump plan would provide.
The story is similar for those in the top 0.1 percent. Romney would have increased their after-tax income by an average of 16.7 percent compared with 18.9 percent under Trump鈥檚 plan. (One caveat to the comparison: It鈥檚 not completely even鈥擳PC estimated Romney鈥檚 tax changes for the year 2015, while TPC assumed Trump鈥檚 would take effect in 2017.)
It is hardly a surprise that Trump鈥檚 tax agenda differs dramatically from that of his Democratic opponent, Hillary Clinton. His tax plan is also, as TPC has shown,聽聽than those of his GOP primary opponents. On top of it all, however, it turns out the 2016 Republican Party is backing a candidate, and a tax plan, that looks聽incredibly聽different from its last standard-bearer.
This article first appeared at .
