Tax Analysts Blog

Trump's Lack of Specifics on Tax Is Hardly Unique

Posted on Aug 31, 2015

The longer Donald Trump's campaign for the White House continues, the harder it becomes for the billionaire developer to completely avoid mentioning substantive issues. Although Trump is quite skilled at talking a lot and offering only sound bites, even he is starting to have trouble filling all the airtime the media so generously grants him. And that means a few actual tax and budget policy statements are starting to come from Trump. On taxes, he's mentioned simplification, ending the carried interest preference, and repatriation. Of course, he hasn't come up with anything resembling a detailed plan linking all these positions together, but that's hardly exceptional during the campaign's silly season.

Trump's most important tax statement is probably his rant about hedge fund managers taking advantage of the favorable tax treatment for carried interest. Under IRS policy, carried interest compensation is taxed at capital gains rates, even though it is almost certainly income associated with services (managing a fund). Trump has said these managers are getting away with murder, although he studiously avoided mentioning that many of the real estate entities that he is involved with allow him to take advantage of this same treatment. Jeb Bush, the floundering former front-runner, called Trump a Democrat, pointing out that his position mirrored campaign statements by both Hillary Clinton and Bernie Sanders.

Trump's repatriation remarks simply echoed the old refrain for those who think the United States shouldn't tax overseas profits. Companies "have $2.5 trillion sitting out of the country that they can’t get back because they don’t want to pay the tax. Nor would I. Everybody agrees that shouldn’t happen," Trump told Time. Leaving aside the fact that some people do think those earnings should be taxed, Trump didn't specify whether his repatriation holiday would be part of a tax reform plan or just something that would move on its own. He has offered even fewer details on how he would fix the broader tax system, saying only that things are too complicated and require him to hire lots of accountants and lawyers.

The bombastic billionaire's remarks have led to familiar barbs from critics about lacking specifics. There are many reasons to dislike Trump and his ill-defined platform (which seems mostly based on nativism and reality-show-style demagoguery), but his lack of policy details at this stage of the game is hardly unique. Bush hasn't put out a detailed economic plan, only calling for tax cuts. Neither has Scott Walker, Chris Christie, John Kasich, Carly Fiorina, or other significant candidates. Marco Rubio is the coauthor of a tax reform plan in the Senate, but that proposal would lose trillions of dollars and would require a great deal of refinement before being pushed in the first 100 days of a presidency.

Most candidates offer nothing but platitudes during their quest for the nomination, particularly so far ahead of actual caucuses and primaries. So Trump's vague pronouncements are nothing new. What probably separates Trump from his other, more experienced rivals is the fact that observers are skeptical that he can ever pull together the various positions he has taken into a coherent platform, either on fiscal, social, or foreign affairs issues. Unlike with some of the experienced governors and lawmakers in the race, it seems clear there's nothing really behind Trump's rhetoric.

Read Comments (1)

edmund dantesAug 31, 2015

"Jeb Bush, the floundering former front-runner, called Trump a Democrat,
pointing out that his position mirrored campaign statements by both Hillary
Clinton and Bernie Sanders."

Jeb! doesn't seem to realize that this statement gains him nothing with
conservatives, but it does encourage those voters who were favoring Clinton or
Sanders to give Trump a closer look. Does Jeb! really wants to win?

At what point in 1979 campaign did Reagan endorse the Kemp-Roth tax cut plan?
That was the only campaign with clearly articulated tax policies that I'm aware
of. Because he ran on it, Reagan was able to push the successor, ERTA, through
in his first 8 months.

I'm no Trump fan, but I wouldn't sell him short.

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