NEW YORK, Sept. 16 (UPI) — When Donald Trump outlined his economic plans in a speech before the New York Economic Club on Thursday, policy experts noted it did not include mention of a significant proposal he outlined months earlier in the campaign: A $1 trillion tax cut for small businesses.
After the speech, campaign advisers offered mixed messages about the fate of the proposal, according to reports in The Wall Street Journal and The New York Times on Friday.
The Times reported Trump’s campaign told a small business group that endorsed Trump the tax cut was still part of his plan. But the proposals given to a conservative think tank the campaign asked to “score” it — meaning, add up the total costs and benefits — reportedly did not include the additional $1 trillion for small businesses.
At its heart, the question is whether all businesses or only corporations would see their tax rate set at 15 percent.
In his speech, Trump said corporations would pay the 15 percent tax rate, but did not clarify whether small businesses and the self-employed would see that reduction, as well.
The Wall Street Journal reports the question is not only one for policy experts to debate. Millions of U.S. businesses, from corner stores and family restaurants to some of the nation’s largest law firms — and some of Trump’s own businesses — pass their profits to their owners, who report it as personal income and do not pay the corporate tax rate.
In August, Trump spoke about his tax plan in detail and said it would benefit small business owners the most.
“Under my plan, no American company will pay more than 15 percent of their business income in taxes,” he said. “Small businesses will benefit the most from this plan.”
Trump also promised on Thursday that his tax plan would be revenue-neutral, meaning it would not expand the deficit. In fact, Trump said it would reduce the national debt by creating an economic boom.
According to economists with the Tax Foundation, the conservative group scoring Trump’s proposal, the only way the plan would be revenue-neutral would be to drop the small business tax cut and leave taxes for many small business owners as they are right now, or find resulting spending cuts or pare back tax cuts elsewhere.
A spokesman for the National Federation of Independent Businesses, a Washington small business lobbying group, said they have endorsed Trump and are “comfortable” in the knowledge the 15 percent tax rate would apply to small businesses, as well as large corporations.
