Trump Tax Plan May Mean Tax Hike For Families
(Corrected: An earlier version of this incorrectly linked to a different tweet from the Tax Foundation.)
Republican presidential candidate Donald Trump has pitched his economic plan as an "across-the-board income tax reduction, especially for middle-income Americans." But a new look at the plan's fine print suggests that as many as 7.8 million families with school-age children could actually see a tax hike as a result of the plan, amounting to hundreds or thousands of dollars.
Trump's tax hike would affect about one fifth of families with "minor" children and about half of all single parents, according a report published Friday by NYU law professor Lily Batchelder.
"For example," Batchelder writes, "a family making $75,000 with two school-aged children, and no child care costs would face a tax increase of $2,440." A family with significant childcare costs could also face a tax hike, Batchelder found.
Trump—who's plan also promises to slash the number income tax brackets to three, at 12%, 25% and 33%, and to sharply cut business taxes—has pitched it as a way to unleash economic growth. Those headline provisions may indeed mean lower taxes for many Americans. But Bachtelder found that other, less well-publicized tweaks Trump has proposed challenge his claim that the plan would benefit the middle-class broadly.
Among the lesser-known provisions that lead to Batchelder's results: Trump proposes repealing so-called "personal exemptions" and replacing them with a higher standard deduction, as well as repealing the head of household filing status, which currently benefits unmarried filers with dependents. She also noted that the new 12% tax bracket wouldn't necessarily represent a cut, since under the current system the first $9,000 of taxable income of single filers is taxed at 10%.
The Trump campaign was quick to dismiss Batchelder's findings, calling them "pure fiction," according to a report in the Washington Post. One bone of contention: Batchelder didn't account for Trump's plan to provide a $500 government match to parents who put $1,000 in new tax-advantaged savings accounts designed to help more families care for dependents.
Batchelder has previously advised the Obama Administration on tax policy, so she is not necessarily a neutral observer. Nonetheless on Monday, analysts from right-leaning Tax Foundation, a think tank whose scoring the Trump campaign itself likes to cite, took to twitter Monday to defend Batchelder's analysis.