Trump’s Smart Tax Decision

He resists Republicans who want a Bernie Sanders tax policy

WSJ editorial. Excerpts:

"As we reported this week, British tax revenues are falling short of projections after the Labour government raised taxes on capital gains and high-earning foreigners, causing a rush to the exits.

Liberals retort that Mr. Trump needn’t worry about a flight of millionaires since as U.S. citizens they’d still pay U.S. taxes even if they move abroad. True, but the wealthy have many ways to shield income from taxation.

As Mr. Trump knows, the rich can hire armies of accountants to reduce their tax liabilities. They can buy tax-exempt municipal bonds or donate land for conservation. Don’t think the rich will change their behavior in response to a 2.6 percentage-point rate increase? When California and New York raised top rates by similar amounts, high earners fled in droves."

"In 2012 Republicans struck a deal with Barack Obama to extend the Bush middle-class tax rates but let the federal top rate revert to 39.6% from 35%. Yet income tax revenue fell $250 billion short of the Congressional Budget Office’s projections between 2013 and 2017."

"Exempting tips, Social Security benefits and overtime from taxes would cost $2 trillion over 10 years, and probably more once workers adjust behavior. Raising the child tax credit to $5,000 would cost another $2.4 trillion."

"In 2022 (the last year this data is available), the top 1% paid 40.4% of federal income taxes and the next 4% of earners paid 20.6%. The top 10% paid 24 times more in tax than the bottom 50%."

"Many Americans are “rich” only for a year or two after decades of working or running a small business."