Despite numbers, Trump tax plan opens key dialogue

If you've followed Donald Trump at all over the years, you know he has no trouble looking out for his own interests.

Monday, despite his claims that it will cost him a fortune, he released a plan that would reduce taxes for him and his heirs, even if they didn't use other loopholes.

Trump's plan would eliminate federal income taxes for singles who earn less than $25,000 or married couples jointly earning less than $50,000; reduce the current seven tax brackets from seven to four: 0, 10, 20 and 25 percent; lower business and corporate taxes to no more than 15 percent of income; cut deductions and loopholes for the rich including the "carried interest" tax break for hedge-fund managers; and a one-time 10 percent tax on the profits of American corporations earned abroad, with the hope it would force companies to bring business and jobs back home.

Fact-checking by the Associated Press turned up problems with Trump's math, however.

While it will undoubtedly reduce the amount of money Americans pay, it would by one estimate cost more than $7 trillion over the next decade, money that would have to be raised from other sources or cut from spending.

A San Diego State University professor said that Americans making more than $200,000 a year will pay $400 billion to $500 billion less in taxes than they do now.

While Trump and his wife should pay 39.6 percent under the current system, they would pay 25 percent under his proposal -- tax on their 2014 income of $362 million would theoretically be reduced by $53 million.

By eliminating the 40 percent inheritance tax on estates of more than $5.4 million, his heirs would save billions of dollars on his estimated net worth of $10 billion.

His companies could also save billions by paying by Trump's cut of the corporate tax rate by 10 points from the current 35 percent.

Trump says he would end some deductions, but not home mortgage interest or charitable gifts, but experts consulted by AP said he would have to make up the difference by tactics such as ending state and local tax deductions and start taxing retirement savings in pensions and 401(k)s.

Trump pointed to $800 hammers and $1 soccer fields as examples of government waste he would cut, but with a Congressional Budget Office estimate of a $426 billion deficit this year, he would have to find 530 million such hammers and 426,000 soccer fields to make up the deficit.

The AP story added that he would have to eliminate all improper or insufficiently documented payments made by the federal government, estimated at $124 billion in 2014, more than three times over.

Such comparisons treat Trump's plan unfairly, however, assuming he promises to eliminate all deficites immediately.

Despite problems with the numbers and the unlikelihood that Trump's tax plan will actually make it into law, it opens up an important conversation about national policies.