Donald Trump just unveiled his tax reform plan and, unsurprisingly, it would be a disaster for the American economy.
Trump’s campaign insists the plan would be “revenue neutral.” It’s hard to see how this could be the case. Based on the tax bracket thresholds in the plan, just about no one would face a higher marginal tax rate than they do now.
[…] Trump would slash rates for just about everybody, across the board. Especially if he plans to entirely preserve the mortgage interest and charitable tax deductions — two of the most costly tax expenditures — it’s hard to see the math working out such that the government wouldn’t lose revenue.
One caveat: Trump has spoken often of his desire to slap tariffs on foreign imports. That could potentially make up a good amount of lost revenue, but would also greatly increase the cost of goods in the US, cause significant economic damage, and probably provoke a massive trade war.
Full analysis here.