Trump Tax Plan Would Slash Rates For Businesses And Individuals

Transcript

DAVID GREENE, HOST:

Republican presidential candidate Donald Trump has released a plan to change the U.S. tax code. It's pretty detailed, especially compared to some of his other policy prescriptions. But, as NPR's Tamara Keith reports, it might have some unintended consequences.

TAMARA KEITH, BYLINE: Donald Trump is a successful businessman who, by his own admission, fights like hell.

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DONALD TRUMP: To pay as little as possible, can I say that? I'm not a politician. I fight like hell always because it's an expense.

KEITH: So let's just say he knows the tax code well. And Trump has a plan he says will dramatically lower the tax rates people pay.

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TRUMP: It will provide major tax relief for middle income and for most other Americans. There will be a major tax reduction.

KEITH: The bottom income tax bracket would drop to 0 percent. The top tax product would go from more than 39 percent now to 25 percent under Trump's plan. And he promises that no business will pay more than 15 percent in taxes. That's a significant cut from the current rate. Grover Norquist, the anti-tax-increase crusader at Americans for Tax Reform, was pleasantly surprised by the plan.

GROVER NORQUIST: It's bold. It goes further than one has to on rate reduction on the corporate level. So it's not, like, off the shelf, and it's clearly thought through.

KEITH: How much will it cost? Robertson Williams at the Urban Brookings Tax Policy Center couldn't say.

ROBERTSON WILLIAMS: You don't know really enough what the numbers would be yet because there will be a lot of shifting around of income in this plan.

KEITH: That shifting, he says, is the unintended consequence of this plan. A lot of businesses are currently taxed at the individual tax rate - freelancers, too. But Trump wants to tax them all at the lower 15-percent corporate rate. And Williams says that would create an incentive for a whole lot of people who have high-paying jobs now to start freelancing.

WILLIAMS: So that a doctor who's working for a hospital will say, I don't want to work for you anymore. I want to become a contractor, and therefore, I - my top tax rate will be 15 percent instead of the 25 percent under the Trump plan.

KEITH: Trump says the plan will pay for itself with economic growth and by removing some tax breaks and loopholes. But many independent analysts say the price tag could be huge. Tamara Keith, NPR News, Washington. Transcript provided by NPR, Copyright NPR.