NEW YORK — Republican presidential front-runner Donald Trump, as part of a plan he said Monday would grow the U.S. economy at a pace not seen in years, proposed eliminating income taxes for millions of Americans and lowering rates for the highest-income earners.
Trump’s plan for an overhaul of the U.S. tax code would eliminate federal income taxes on individuals earning less than $25,000 and married couples earning less than $50,000.
Trump’s plan also would benefit wealthy earners, by lowering the highest income tax rate from 39.6 percent to 25 percent. It would help businesses — from major corporations to mom-and-pop shops — by cutting the tax rate to no more than 15 percent.
“There will be a major tax reduction,” Trump said in Manhattan. “It’ll simplify the tax code.”
Trump said he wants to eliminate the “carried interest loophole,” which allows managers of hedge funds and private equity firms to pay a lower tax rate than most individuals, and would reduce or eliminate most deductions and loopholes for individuals and corporations. “In other words, it’s going to cost me a fortune,” he said.
The billionaire real estate mogul said those changes would pay for the tax cuts.
Jared Bernstein, former chief economist for Vice President Joe Biden, said before Trump’s news conference there were “a couple of inherent problems” with Trump’s plan. He pointed out that about 40 percent of Americans are exempt from paying federal income taxes and the tax burden on the middle class “comes from other places.”
“Lowering payroll taxes, that’s one thing. But then you have a Social Security funding problem,” Bernstein said.
Bloomberg News contributed this report.
Other gop tax plans
• Former Florida Gov. Jeb Bush suggested three (slightly higher) tax
brackets this month. The cuts
would cost an estimated $3.4 trillion
over a decade, with a net revenue loss
of $1.2 trillion after projected
• U.S. Sen. Marco Rubio has proposed abolishing the alternative minimum
tax and ending all deductions, save
those on charitable giving and
mortgage interest. The plan to slash
taxes on investments, wages and
business income would reduce
collections by $1.7 trillion during the
same time while, like Bush, largely
favoring the top 1 percent.