No, Trump is not on your side. Just look at his tax plan.

Kansas head coach Bill Self, right, talks with referee Joe DeRosa during the first half of an NCAA college basketball game in Lawrence, Kan., Monday, Feb. 15, 2016. (AP Photo/Orlin Wagner)

Kansas head coach Bill Self works the referee at a Jayhawks’ basketball game. (AP)

Donald Trump uses only the best words, and one of the bestest of those best words is “rigged.” The election is rigged, the polls are rigged, the media are rigged, our trade deals are rigged, the economy is rigged. And he alone can change all that. He is our de-rigger de riguer.

But you know what it is really really rigged? Trump’s so-called “tax-reform plan,” the one that’s supposed to “Make America Great Again.”

The one that would eliminate the estate tax, thus saving the Trump family as much as $4 billion in taxes while saving 99.8 percent of American families exactly zero. The one that would also create a major new tax loophole for the wealthy, allowing them to pay income taxes at less than half the rate that they pay now, and at less than half the rate that most working stiffs would have to pay.

In fact, that proposed Trump loophole is such a beautiful example of rigging the system in favor of the wealthy that it demands a closer look, just to learn how such a thing can be done right in front of our eyes.

Let’s begin with the fact that under the Trump plan, the highest tax rate on individual income would drop from 39.6 percent to 33 percent. That in itself would provide a big tax cut for wealthy Americans, but it’s not where the real money is. No, it’s a little more sneaky than that. The real money comes from a special “pass-through” tax provision, affecting income that is “passed through” to individual taxpayers by legal entities such as S corporations, LLCs, partnerships and sole proprietorships.

For our purposes, you need to know two things about pass-through income and entities:

8-8-16taxtrump1.) Most pass-through income is earned by the wealthy. The Trump Organization, for example, is basically a collection of some 200 different legal entities that exist to pass through income to Trump and his family. According to the most recent studies, 69 percent of “pass-through” income is accrued by the wealthiest 1 percent of Americans.

2.) Under the Trump plan, “pass-through income” would no longer be taxed the same as the income that you and I get in our paychecks. Instead, it would be taxed at a special reduced rate of 15 percent, or less than half the rate as regular earned income. (A similar provision is included in the tax plan proposed by Paul Ryan and House Republicans.)

In other words, if you earn income through a paycheck, under Trump’s plan you’ll be taxed at a rate up of to 33 percent, with payroll taxes on top of that. However, if you can arrange to be paid that same income through a “pass-through entity,” you’ll be taxed at just 15 percent, with no payroll tax liability. That’s some sweet rigging right there.

And if you’d like an example of how that works in real life, I can accommodate you:

As part of the “supply-side” tax experiment in Kansas perpetrated under Gov. Sam Brownback, state taxes on pass-through income have been eliminated altogether. Today, if you earn $60,000 through a paycheck in Kansas, you pay a state income tax rate of 4.6 percent. If you get paid that same $60,000 through a pass-through entity, you pay a state income tax rate of zero.

As Brownback bragged four years ago, that and other changes were supposed to provide “a shot of adrenaline into the heart of the Kansas economy,” but it has failed abysmally to keep that promise. Growth in Kansas has lagged well behind the rest of the country, with one notable exception: The number of tax-free “pass-through entities” in the state jumped from 191,000 in 2012 to 334,000 at most recent count, and the amount of revenue lost through that loophole has helped drive the state into a deep financial crisis.

One of those Kansas pass-through entities is something called BCLT II, LLC, created by a man by the name of Bill Self. If you’re a college basketball fan, you probably recognize Self as the highly successful coach of the University of Kansas. He’s paid a nice salary of $230,000 by the state, but as NPR’s Kansas affiliate points out, that’s not how he gets the bulk of his compensation. Instead, Self has arranged to collect at least $2.75 million a year paid through BCLT II for “professional services rendered.” As a result, he pays zero state income tax on that money.

The vendor working the stands and selling soft drinks at a Jayhawks’ game pays a state income tax. The person collecting tickets pays a state income tax; the cop providing security pays a state income tax. But on the vast bulk of his income, Coach Self has legally arranged things so that he pays nothing.

To once again borrow one of the very best words, that is what “rigged” looks like. And it’s basically what Trump and the Republican Party want to do to the federal system as well. On your behalf, of course.

 

Reader Comments 0

1389 comments
Donnie_Pinko
Donnie_Pinko

Wow. So Russia has air forces on the ground in Iran for the first time since the second world war.

ByteMe
ByteMe

Manafort quit.  

FIGMO2
FIGMO2

@ByteMe

No doubt due to the optics. Hillary's just putting a patch over the left's eye.

McGarnagle
McGarnagle

@ByteMe


Its like changing your quarterback in a middle a drive. All part of a winning strategy.  

Donnie_Pinko
Donnie_Pinko

@ByteMe 

Once again, Western analysts are left searching for clues as to Vladimir Putin's next move.

TBS
TBS

Yep

Two minute drill for the winning touchdown and they bring in the third string guy to fool the defense.

ByteMe
ByteMe

@JohnnyReb Yawn.  There's a black guy under your bed.  Better move over.

ByteMe
ByteMe

@Donnie_Pinko They'll find a scorched body at the Mexican border wrapped in a "muslim prayer blanket" and it'll take 85 days of breathless Breitbart speculation to find out it really isn't Vince Foster.

Visual_Cortex
Visual_Cortex

that is correct but at least Trump actually had a business and worked in a real job, the Clintons for the majority of their life have lived off the taxpayer in one form or another,

Infraredguy, where do you think the lion's share of the Trump-daddy fortune came from, originally?

Might want to think that one through and maybe even do some googling before answering.


ByteMe
ByteMe

@PaulinNH I'm regularly amazed by what people do to entertain themselves.  I guess viagra isn't available to them.

TBS
TBS

I doubt Viagra would be the cure. Would just create another problem with no one to help them solve it

Visual_Cortex
Visual_Cortex

@PaulinNH @Visual_Cortex

Psst. I'm mostly putting this in a new post to make non-trolls consider just what Daddy Trump used to do to create this fortune.

It was mostly taxpayer-subsidized apartment buildings; without "big government" (and NYC is pretty dang big) footing the bill, no telling if that business ever would've gotten off the ground, and if spoiled-rotten little Donnie would've grown up in a nine-bedroom mansion.

LordHelpUs
LordHelpUs

 JR writes: "it's customary for a president to withdraw from all involvement of his business and investments interests."  As if Trump would do that.  Good Lord...

JohnnyReb
JohnnyReb

Where's Barry?

Playing golf while Louisianan's drown.

Apparently the State Department admission of ransom for the Iranian hostages makes him fearful of showing his face.

kitty72
kitty72

@JohnnyReb  I agree that Obama should visit after his vacation. But does cutting his vacation short help anything? His vacations are working vacations.

ByteMe
ByteMe

@JohnnyReb He can kick your little a%% in that too.  He's awesome compared to the blog trolls.

Infraredguy
Infraredguy

@kitty72 Working vacations ? that's what he does when he's in the White House

Visual_Cortex
Visual_Cortex

@LordHelpUs @JohnnyReb

Ooh, can I guess?

I think he wants Barry Bamz to be ashamed on our behalf that we ever said not-nice things about the W administration back in the day. 

JohnnyReb
JohnnyReb

@kitty72 @JohnnyReb If it was W, you LibProgs would be yelling for impeachment.

You're too easy, too forgiving on the guy.

JohnnyReb
JohnnyReb

@Visual_Cortex @JohnnyReb @kitty72 well, you won't have worry about that because Trump wins in November.

However, should the devil prevail, you can bet she won't get the forgiveness as has Obama.

The weak kneed, no fortitude Congress won't have to worry about blacks burning down the nation. 

Visual_Cortex
Visual_Cortex

@JohnnyReb @Visual_Cortex @kitty72

because Trump wins in November.

Yeah, PA and VA are turnin' red, just you wait. Uh huh.

The weak kneed, no fortitude Congress won't have to worry about blacks burning down the nation. 

Right now they do worry about "the blacks" doing this, though, amirite?

I guess there's a silver lining in every cloud.

Visual_Cortex
Visual_Cortex

@JohnnyReb @kitty72

Yawn. Is there a day that goes by when your ConWingers aren't yelling for impeachment?

Guess it's died down a tad here in the homestretch, but you do get my point

And just to put the cherry on top, assuming Hils is elected and the GOP holds the House? I give the latter body about twenty-seven seconds after the swearing-in ceremony for the first Congresscritter to make some noise about impeaching her.

Nick_Danger
Nick_Danger

@JohnnyReb 

If the President himself isn't tossing sandbags, Louisiana is DOOMED! 

DOOOOOOOMED!!!!!!!1!

C_Casselberry
C_Casselberry

@JohnnyRebb It's been shown over and over that W and St Ronnie took far more vacation than Obama. But you don't read do you? Can you?