The Donald Trump tax plan will help the middle class while punishing hedge fund managers and companies that have sent American jobs overseas. That's according to the hints that leading Republican presidential candidate Donald J. Trump has dropped so far.
"We have an amazing tax plan," Trump said on the CBS News program "Face the Nation" this past Sunday. "We're going to be reducing taxes for the middle class, but for the hedge fund guys, they're going to be paying up."
Trump has dominated most of the polls in recent weeks. According to the Real Clear Politics average, he has the support of 30% of the Republican voters, compared to 20% for retired neurosurgeon Ben Carson. Former Florida Gov. Jeb Bush leads the rest of the pack with 7.8%.
While the Donald Trump tax plan has not yet been released - the real estate magnate has promised to unveil it in about two weeks - we already know several of its key points.
Some of the Trump tax plan details have come out in interviews, while others can be inferred from his 2011 book, "Time to Get Tough." In that book, Trump described several tax proposals. It's likely many of those ideas will form the foundation of the 2015 Trump tax plan.
One part of the Trump tax plan that he has discussed concerns hedge funds. Right now, hedge fund managers pay a 20% capital gains tax, although their income would otherwise push them into the top 39.6% income tax bracket.
Trump has said that hedge fund managers are "getting away with murder" and has pledged to increase what they pay. But he hasn't explained exactly how he will do this.
The Trump tax plan will also feature greatly reduced taxes on businesses. Right now, the U.S. corporate tax rate is 35% - among the highest in the world. It's the main reason about $2.5 trillion in U.S. corporate profits are sitting in overseas bank accounts.
Here's what Trump had to say about that:
"The corporations rightfully don't bring it back because they have a massive tax to pay, and we've got to make it so they can bring it back," Trump said on "Face the Nation." "So we're going to make it possible for them by lowering their tax rate. We're going to be lowering it for corporations because we want jobs."
While Trump hasn't said how low he plans to go, in his 2011 book, he proposed eliminating the corporate tax altogether.
But corporations won't get a free ride under a Donald Trump administration. His plan for bringing outsourced jobs back to the United States entails slapping a tariff on the goods manufactured overseas.
In a CNN interview last month, Trump brought up a $2.5 billion plant that Ford Motor Co. (NYSE: F) is building in Mexico. He's proposed a 35% tax on Ford imports from Mexico.
"If the labor's cheaper over there that's good, but you know what, you're gonna have to pay a tax to get those cars back in. You're gonna have to pay a penalty."
In his book, Trump suggested a 20% tax on all imported goods. He's also mentioned the possibility of some sort of tax reward for companies that return jobs to the United States.
Another idea Trump has floated is "putting the IRS out of business" by simplifying the tax code. However, how a Trump tax plan would achieve this is murky at the moment.
"I want to make it very simple. And we can leave the tax code the way it is and simplify it, or you could go to a form of a flat tax. You could go to a fair tax. There's a lot of things you could do," Trump told Time in an Aug. 18 interview.
Trump's "Time to Get Tough" book offered a lot more detail than what he's said in interviews and campaign speeches.
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Here are three key components of the 2011 Trump tax plan:
Critics studying Trump's statements, as well as the 2011 book, point out that all the tax reductions could cause big problems for a federal budget that already runs hundreds of billions of dollars in the red every year.
Any increase in U.S. economic activity resulting from the additional money in people's pockets would fall well short of making up for the lost tax revenue.
That's the biggest question Trump will need to address when he finally reveals his proposals. But that's just one of many blanks that need to be filled in the 2015 Trump tax plan.
Qualified to Be President? Three of the leading contenders for the Republican presidential nomination have no elected experience. That includes Donald Trump, Ben Carson, and Carly Fiorina. But if any of the three are elected to the White House, it would not be the first time such an "inexperienced" person became president. These presidents never held a prior elected office... Â
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