Donald Trump’s Amazingly Conventional Tax Plan

“I’m not a populist,” the Republican frontrunner declared on Monday—and his latest economic proposal proves it.

Charlie Neibergall / AP

Maybe Donald Trump isn’t such an unconventional politician after all.

The Republican presidential frontrunner released his tax plan on Monday morning, and the most noteworthy thing about the proposal is how utterly plain-vanilla it is. Yes, Trump’s plan would dramatically reshape the tax code by cutting the current seven income brackets to four, slashing rates for the rich, poor, and businesses, and eliminating a host of loopholes and deductions. But that’s basically what Republican candidates and lawmakers have been proposing for years. Trump is hardly breaking the mold.

That’s not how Trump described it, of course. Standing next to the now-iconic gold-trimmed escalator in Trump Tower and surrounded by his usual cadre of sign-holding tourist-campaign-supporters, the candidate presented his proposal as if he were Moses delivering the Commandments. “It’s a tax reform that I think will make America strong and great again,” he declared. Trump added later in the press conference: “I think people will be very happy.”

And why wouldn’t they? In Trump’s telling, just about everyone would see a tax cut—except perhaps himself. (“It’s going to cost me a fortune,” he said, although when you look at the details of the plan, it wasn’t clear this would actually be true.) The top marginal income rate would drop to 25 percent from nearly 40 percent, middle-income earners would pay 10 or 20 percent, and anyone earning less than $25,000 a year ($50,000 for married couples) would pay no income tax at all. Trump would scrap the marriage penalty, the estate tax, and the alternative minimum tax. Businesses would pay no more than 15 percent of their income to the government.

Don’t you worry: None of this would add any money to the deficit. How does Trump pay for it? He’d start by eliminating loopholes for “special interests and the very rich,” including the much-anticipated scrapping of the preferential tax treatment of “carried interest” for hedge fund managers. But Trump would keep the most popular deductions—a generous standard deduction of $25,000, plus the mortgage interest and charitable deductions. And he’d encourage corporations to bring trillions of dollars in profits back from overseas by charging them a one-time 10 percent “fee.” As tax experts quickly pointed out, these revenue-raisers wouldn’t come close to offsetting the enormous tax cuts in Trump’s plan, and Trump’s campaign made no effort to detail exactly how the numbers would add up.

He did acknowledge there would have to be spending cuts, but in typical Trump-style, they would be the greatest cuts ever. “We will be able to cut so much money,” he said. But he promised that he could cut spending “without losing anything.” The closest Trump got to a specific cut was when he talked about how expensive it now is to ship washers that cost “19 cents" from state to state—literally nuts and bolts. “The waste that I get rid of,” he promised, “is going to have a huge impact, and I’m not even putting that in my numbers.”

Trump’s written plan did have one creative touch. Nearly 75 million households who would no longer pay any income tax would simply get a form saying, “I win,” that they would send back to the IRS, according to his site.

If you are single and earn less than $25,000, or married and jointly earn less than $50,000, you will not owe any income tax. That removes nearly 75 million households – over 50% – from the income tax rolls. They get a new one page form to send the IRS saying, “I win,” those who would otherwise owe income taxes will save an average of nearly $1,000 each.

Yet superlatives aside, in most other respects the Trump proposal falls well within the Republican mainstream: It’s a big tax cut for the wealthy that, despite claims to the contrary, will add trillions to the deficit. “The best way to think about this plan is, start with Governor Jeb Bush’s tax plan and then make it a larger tax cut,” said Kyle Pomerleau, an economist at the Tax Foundation. Bush’s proposal, which he released over the summer, would cut anywhere from $1.6 trillion to $3.6 trillion, depending on how it is scored by budget forecasters. Bush put his top marginal income rate at 28 percent, while Trump dropped it to 25 percent, and Trump included a much larger standard deduction. (The Tax Foundation hasn’t yet done a full analysis of the Trump plan.)

Even the change in the carried interest loophole is more generous in Trump’s plan, despite his promises that the “hedge fund guys” would pay a lot more if it got to the White House. “Getting rid of that is only going to raise about $1 billion per year,” Pomerleau told me, “while the individual tax cuts alone are probably going to be close to $100 billion.”

Trump’s plan won a thumbs-up from Grover Norquist’s Americans for Tax Reform, which certified that it adhered to the group’s pledge against raising taxes. It thoroughly confused the conservative Club for Growth, which had been warring with Trump over his past support for Democratic candidates and liberal policies. “His tax plan begs the question,” asked David McIntosh, the Club’s president. “Does this mean you were completely wrong about all your liberal policies on taxes, trade, health care, bailouts, and eminent domain?”

Democrats like Austan Goolsbee, the former chairman of President Obama’s Council of Economic Advisers, found it more amusing than anything else.

As a formal policy proposal, Trump's tax plan might be the biggest indication yet that he’s serious about winning the Republican nomination, and not, say, mulling an independent run. It’s certainly a more important commitment to the party orthodoxy than the awkward “loyalty pledge” he signed this summer. And the proposal should also put to rest the suggestion that the real-estate magnate was embracing a populist economic platform. And the candidate himself admitted as much on Monday. “I’m not a populist,” Trump said. “No, I’m not. I’m a man of great common-sense.”

That’s one way to put it. But judging by his supply-side tax proposal, conventional Republican is another.