Fact-check: Trump claims the Republican tax plan will 'cost me a fortune'

STORY HIGHLIGHTS

"It is going to cost me a fortune, this thing," Trump said
He gave a speech in St. Charles, Missouri, on Wednesday

Washington (CNN)President Donald Trump claimed on Wednesday that the Senate Republican tax plan will cost him and his family "a fortune."

Trump turned to his oft-used "believe me" line during a speech in St. Charles, Missouri, telling the friendly audience that the tax plan will cost him.

"America's tax code is a total dysfunctional mess. ... It is riddled with loopholes that let some special interests, including myself, in all fairness -- it is going to cost me a fortune, this thing," Trump said. "Believe me, believe me, this is not good for me."

On Thursday, White House press secretary Sarah Sanders said the President was referring to "deductions that may no longer exist" that he and his family use.

"A lot of the deductions that he would probably normally receive may not be part of the package that would affect ... what he pays in taxes," Sanders said. "Again, until there is a final piece of legislation, I can't go into much more detail. But I know that some versions of it take out a lot of those deductions that currently benefit the President and his family."

It's impossible to say specifically how Trump would be affected, since the President has never released his tax returns. But at least three key provisions in the Senate plan suggest he and his family likely wouldn't be hit hard at all.

Lower taxes on their businesses: Like the GOP bill that passed in the House, the Senate bill would lower taxes on so-called pass-through businesses, which is how most, if not all, of Trump's hundreds of businesses are structured.

Pass-throughs -- LLCs, partnerships, S corporations and sole proprietorships -- are not taxed under the corporate code. Instead, their profits flow through to the owners, partners and shareholders, who pay taxes on them through their individual tax returns.

An even gentler estate tax: As it is today, the estate tax affects only 0.2% of estates.

The Senate bill would further reduce who's affected and lessen the burden on those who still are by doubling the amount of money that would be automatically exempt from taxation -- to roughly $11 million for individuals, up from $5.49 million today, and to $22 million for married couples, up from $10.98 million currently.

The House-passed bill does the same thing, but then goes one step farther and calls for a full repeal of the estate tax by 2024.

Both bills also would preserve what's called a step-up in cost basis. The step-up rule basically lets people inherit, tax free, any asset with untaxed capital gains.

Here's how: Say you bought shares in a company eons ago for $50 a pop. You never sold them and bequeath them to your children.

When you die, the shares are trading at $150, for a gain of $100 per share. That gain will be tax-free forever because when your kids inherit them, they get a "step up" in their capital gains basis to $150, meaning the only tax they'll owe is on the appreciation in price over $150 should they ever choose to sell the shares.

Repeal the AMT: Tax filers are supposed to pay whichever is higher: their tax bills under the rules of the regular tax code or under the rules of the Alternative Minimum Tax, which disallows various tax breaks.

The super-rich are not typically hit by the AMT, because they end up owing more under the regular income tax code.

Trump may be an exception.

Based on what little is known of his taxes, he had to pay an additional $31 million on his 2005 return because of the AMT. That's most likely due to the outsized net operating loss ($916 million) that he reported in 1995 and was allowed to carry over from year to year. The AMT disallows some net operating losses.

It's not known if Trump is still carrying such large losses. But if he is, a repeal of the AMT could further reduce his tax burden.

CNN Money's Jill Disis contributed to this report.

Comments

CRISPART NEWS

China’s Xi sends rare message to North Korea’s Kim By AFP 02 November 2017 | 10:15 am Cambodia celebrates water festival with boat races 35 mins ago Fayose commiserates with Tinubu over son's death 1 hour ago APC, Buhari, others commiserate with Tinubu over son’s death 5 hours ago (FILES) This file photo taken on September 3, 2016 shows China’s President Xi Jinping speaking during the opening ceremony of the B20 Summit prior to the G20 Summit in Hangzhou. China’s ruling Communist Party declared its General Secretary Xi Jinping the “core” of its leadership on October 27, the official Xinhua news agency reported, elevating his already powerful status. / AFP PHOTO / POOL AND AFP PHOTO / ALY SONG Chinese President Xi Jinping has sent North Korean leader Kim Jong-Un a rare message “out of politeness,” Beijing said Thursday, in his first public communication with his wayward neighbour for more than a year. The note signalled a possible improvement in their strained relationship, which has soured over Pyongyang’s growing weapons ambitions even though Beijing is its longtime ally and economic benefactor. Xi’s message, dated Wednesday, was sent in response to congratulations from Kim last week for securing a second term as the head of China’s ruling party. “I wish that under the new situation the Chinese side would make efforts with the DPRK side to promote the relations between the two parties and the two countries to sustainable soundness and stable development,” Xi said, according to the North’s KCNA news agency, addressing Kim as “Comrade Chairman”. In his earlier note, Kim had offered Xi his “sincere congratulations” and expressed his belief that their relations would develop “in the interests of the people of the two countries”. Chinese foreign ministry spokeswoman Hua Chunying told a regular press briefing in Beijing Thursday that North Korea’s message was just one among many others received. Xi had responded “out of politeness,” she said. The last time KCNA reported a message from Xi was in July 2016. Analysts say that such exchanges have become extremely rare under the current leaders, even though Beijing and Pyongyang traditionally sent greetings and congratulations on each other’s key anniversaries in the past. Their relationship was forged in the bloodshed of the Korean War, when Mao Zedong sent millions of “volunteers” to fight US-led United Nations forces to a standstill. Mao described the allies as close as “lips and teeth”, and China has long been accused of failing to enforce United Nations sanctions against the North for its banned nuclear weapons and ballistic missile programmes, even after voting for them in the Security Council. But Beijing has grown increasingly frustrated by its belligerent neighbour, and rapidly backed a new set of UN measures after a flurry of missile launches by the North and its sixth nuclear test in September. Professor Yang Moo-Jin of the University of North Korean Studies in Seoul said the public exchange of messages signalled a willingness on both sides to improve relations. “The fact that both sides are swiftly trading letters and announcing it carries a symbolic meaning,” Yang told AFP. “If the message was more intimate, we could expect a faster thawing of ties,” he added, “but for now, it shows that both sides agree on the need to improve their relations”.

Naija News Bank

Search This Blog