In his victory speech following the 2016 Nevada primary, then candidate Donald Trump thanked those who made a difference during his campaign including a shout out for one demographic of which he seemed most proud. “We won with poorly educated. I love the poorly educated.” I too would love this segment of the voting population if they continuously supported me despite the fact my policies and programs were not in their self-interest. The best analogy is Trump as Omega Theta Pi pledge master Gregory Marmaland (James Daughton) in “Animal House,” wielding the ritual paddle on initiation night. One can imagine Trump’s glee as he recalls, “Each inductee, with tears in their eyes, begged ‘hit me again, SIR.'”
However, if you want to understand the difference between “the uneducated” and “the just plain stupid” despite academic credentials, look no farther than page 696 of the Heritage Foundation autocracy handbook, “Mandate for Leadership: The Conservative Promise,” otherwise known as Project 2025.
Intermediate Tax Reform. The Treasury should work with Congress to simplify the tax code by enacting a simple two-rate individual tax system of 15 percent and 30 percent that eliminates most deductions, credits and exclusions. The 30 percent bracket should begin at or near the Social Security wage base to ensure the combined income and payroll tax structure acts as a nearly flat tax on wage income beyond the standard deduction.
This chapter in MAGA’s 900+ page encyclopedia of malarkey was written by William L. Walton, Stephen Moore and David R. Burton. Walton is a venture capitalist with a B.S. and M.B.A. from Indiana University and life memberships in MENSA and the NRA, which suggests he is probably more qualified to address the need for “smart firearms” than economic policy. Moore is an economist with degrees from the University of Illinois and George Mason University and senior economic writer for the Wall Street Journal. According to his Heritage Foundation bio, he is the recipient of the Ronald Reagan “Great Communicator” award “for his advancement of economic understanding.” That honor will crop up again in this discussion. Burton is a specialist in “securities law, capital markets, financial privacy, tax matters, and regulatory and administration law issues” at Heritage. He holds a B.A. from the University of Chicago and a law degree from the University of Maryland. Based on his range of policy responsibility, he is the Jared Kushner of Heritage’s “where’s the loophole” division.
With the best education and real-world experience of these three old, white men, let us see what they actually proposed as tax policy to benefit all Americans. First, it is not original. Remember Moore’s Ronald Reagan award for communications. A two-bracket regressive tax system, with rates of 15 and 28 percent, were established in 1988 by none other than (drum roll) Ronald Reagan. This supply-side fantasy lasted exactly two-years before subsequent presidents including George H. W. Bush proposed a return to a more progressive rate schedule with additional tiers. [Note: Moore, et. al., do not mention this former iteration of a two-rate system or credit Reagan for its origin. At Miami University, where I was a professor, we would not have recognized Moore for his communications skills. We would have charged him with plagiarism.]
Assuming this is Moore’s first offense, we will put him on probation. It is more important that we understand how this scheme supports MAGA policy objectives. In 2018, Trump’s Secretary of Commerce Wilbur Ross lauded the president’s 2017 tax legislation. “As Americans filed their taxes this spring, they wrestled for the last time with a system that for decades plundered their paychecks and made American businesses uncompetitive.” Sounds good. But remember, in 2016 Ross reimbursed investors $11.8 million and was fined $2.3 million by the SEC for fee overcharges. In 2017, he was accused of insider trading after selling his shares in the Bank of Ireland. In 2018, his partners accused him of siphoning $120 million from WL Ross & Co. To paraphrase John Houseman, “He made money the old fashioned Trump way, grifting.”
Damn, it is so hard to keep on message. So let’s give Ross a pass (as would the current Supreme Court) and take a deep dive into that paragraph that lays out the 2025 tax proposal and see whose paychecks get plundered and whose do not. First, it is important that to understand what remains the same and what changes.
- In the current system and Project 2025, all taxpayers are entitled to a standard deduction, $29,200 for married couples filing jointing and $14,600 for single filers. Each year the size of the standard deduction is adjusted based on the Consumer Price Index. Your gross income minus the standard deduction becomes your taxable income.
- This tax year, there are seven incremental tax brackets ranging from 10 percent on the first $19,900 of taxable income to 37 percent on all taxable income over $628,300.
- Under the proposed system there would be two brackets, 15 and 30 percent. The higher rate would kick in at the “Social Security wage base,” the point at which workers no longer contribute 6.2 percent of their gross salary to the Social Security trust fund. For 2024, the wage base is $168,000.
With this information, you can now calculate the tax liability of individuals and married couples with different income for tax year 2024 and what it would be if the Project 2025 system was in effect. Let me give you a few examples starting with Americans at the lower end of the wealth spectrum.
For a Married Couple Making $50,000/year
Taxable Income for 2024 would be $20,800
This year they would pay $2,236
Under Project 2025 rates they would pay $3,120
An additional tax burden of $884
For an Individual Making $50,000/year
Taxable Income for 2024 would be $35,400
This year he/she would pay $4,118
Under Project 2025 rates he/she would pay $5,310
An additional tax burden of $1,192
Maybe I misunderstood the objective. Maybe Project 2025 tax policy is designed to reduce the federal deficit and national debt. In which case, this seems like a reasonable contribution by lower income families and individuals. Let’s see how much the wealthy contribute to this goal.
For a Married Couple Making $1,000,000/year
Taxable Income for 2024 would be $970,800
This year they would pay $289,665
Under Project 2025 rates they would pay $266,040
A savings of $23,625
Surely the 0.1 percent wealthiest Americans will make up for this.
For a Married Couple Making $5,000,000/year
Taxable Income for 2024 would be $4,970,800
This year they would pay $1,769,665
Under Project 2025 rates they would pay $1,466,040
A savings of $303,625
Now I get it. Project 2025 tax policy is nothing more than an opportunity for Trump to hold a party at Mar-a-Lago for his major donors and tell them once again, “I made you a lot of money today.” And the uneducated voters he loves so much get screwed again.
But these “men of UNreal genius” are far from finished. The algorithms I created for the EXCEL spreadsheet to test the impact of the Project 2025 tax proposal provided the means to test the financial costs or benefits for families and individuals at any level of annual income. And that’s how I found the following anomaly, perhaps the most damning evidence you should not believe anything these idiots tell you.
In the Foreword titled, “A Promise for America,” Heritage Foundation president Kevin Roberts writes.
The Heritage Foundation is once again facilitating this work. But as our dozens of partners and hundreds of authors will attest, this book is the work of the entire conservative movement. As such, the authors express consensus recommendations already forged, especially along four broad fronts that will decide America’s future:
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- Restore the family as the centerpiece of American life and protect our children.
Okay! If that is the goal, certainly the tax policy, even it if is biased toward the wealthy, will incent the formation of families. Wrong! Consider the following comparison of current tax policy to Project 2025.
For a Married Couple Making $100,000/year
Taxable Income for 2024 would be $70,800
This year they would pay $8,236
Under Project 2025 rates they would pay $10,620
An additional tax burden of $2,384
For an Individual Making $100,000/year
Taxable Income for 2024 would be $85,400
This year he/she would pay $14,261
Under Project 2025 rates he/she would pay $12,810
A savings of $1,451
In simple English, here is the message emitting from the brilliant minds of Walton, Moore and Burton. Want to save $3,800 a year in taxes? Don’t get married. Just shack up. Of course, you might get arrested by the Christian nationalist morality police for living in sin. But that’s a small price to pay for a $300/month tax break.
Maybe that’s why we all should embrace the uneducated. They would never come up with anything half as stupid as these guys, all of whom will likely be members of a second Trump administration under Project 2025’s personnel mandate, “Replace expertise and experience with loyalty.”
For what it’s worth.
Dr. ESP
The (caution:malaprop ahead) flaw in the ointment is that high earners are probably smart enough to find deductions in excess of the standard. Nevertheless, it is easy for any political candidate to promise tax reform, because the definition of tax reform is so nebulous. Any candidates can gain votes by shouting, ” YOU will pay less taxes, and everyone else will pay more.”
Did you miss the part where they plan to eliminate “most deductions, credit and exclusions?” Though, as my father said about the Reagan tax plan, “This is the Accountants and Lawyers Full-Employment Act.”