November 9, 1999
Politicians are always tinkering with the tax code and haggling about the Federal budget and while it is true that we have a healthy surplus right now, no one has put forward a plan to make this country entirely debt free as we enter the next millennium.
The plan I am proposing
today does not involve smoke and mirrors, phony numbers, financial gimmicks
or the usual economic chicanery you usually find in Disneyland-on-the-Potomac.
Here is the TRUMP plan;
I would impose a one-time 14.25% net worth tax on individuals and trusts with a net worth of over $10 million.
For individuals, net worth would be calculated minus the value of their principal residence.
That would raise $5.7 trillion that we would use to pay-off the national debt.
We would save $200 billion in interest payments annually, which would allow us to cut taxes on middle-class working families by $100 billion a year or $1 trillion over ten years.
We can use the rest of the money, $100 billion to bolster the social security trust fund.
Over the next thirty years, when the trust fund is scheduled to go broke, we can put $3 trillion into the trust fund. This will make the trust fund solvent through the next century.
My proposal would also allow us to entirely repeal the 55% Federal Inheritance tax which really hurts farmers and small businessmen and women more than anyone else.
By my calculations 1% of Americans who control 90% of the wealth in this country would be affected by my plan ó the other 99% of the people would get deep reductions in their federal income taxes.
The wealthy would not suffer. With no national debt and deep cuts in income taxes, we would experience a 35-40% boost in economic activity. Individuals and businesses would be more prosperous and our economic future would be brighter. America would experience the greatest economic boom in our history.
Personally this plan
would cost me hundreds of millions of dollars but, in all honesty,
it is worth it.
The increase in economic activity and more income in the pockets of the American people would mean more business start-ups, more job opportunities, lower unemployment, more tax revenue and prosperity for all Americans.
It is a win-win idea for the American people, an idea no conventional politician would have the guts to put forward.
I recognize that the special interests would fight my plan but I believe it would prove so popular with the American people that Congress would fail to pass it only at their own peril.
I am persuaded that if I were elected President of the United States I could, with the strong support of the American people, convince the leaders of Congress to enact this plan.
Q: Mr. Trump, can you outline your plan?
A: Yes, I propose a one-time 14.25 % net worth tax on individuals with a net worth of greater than $10 million. This would raise $5.7 trillion in revenue. I would pay off the national debt entirely. That would save us $200 billion in annual interest payments. I would use $100 billion of this savings for tax cuts on the middle class and put the other $100 billion in the social security trust fund every year. That would make the social security system solvent for the next century. I would also repeal the 55% Inheritance Tax.
More importantly America would experience the greatest
economic boom in our history.
Q: Isnít your proposal unfair to the rich and confiscatory?
A: Look, we already have a graduated tax system where
people who make more and have more, pay more. The courts have already said
that this is Constitutional. My proposal puts the burden on those who can
best afford it. Frankly, the wealthy would benefit as much as all Americans
from a booming economy and from the repeal of the 55% Inheritance Tax.
Q: Donít you think that capital will flee the country due to your tax proposal?
A: On the contrary, paying off our debt and cutting
taxes will cause such an economic boom in this country that no one will
walk away from the opportunities. One of the basic rules of economics is
that capital always follows opportunity. With no debt and lower taxes I
actually predict an influx of capital.
Q: Some critics have said that your plan can cause a stock market crash as the wealthy dump stock in order to pay their taxes?
A: Nonsense. When we pay off the national debt obviously
we would retire all of the government bonds. That would free up enormous
capital that could be put in to stocks and private equities. Americans
could invest in companies like General Electric and General Motors instead
of government debt instruments.
Q: Arenít you afraid your proposal will cause economic dislocation and unemployment?
A: I am advocating targeting super wealthy individuals,
not their businesses. Paying off debt and lowering taxes will create thousands
of jobs and create opportunity. Therefore, I reject all these doomsday
Q: How will rich people come up with a 14.25 % payment to the government?
A: The same way every taxpayer does when they owe
the IRS ó they can either borrow the money against their enormous assets
or liquidate some assets in order to pay their taxes ó it happens every
April 15th. However, in the case when a wealthy tax payer is not liquid,
we could phase in their payments over time ó say ten years ó as long as
government knew they could count on the revenue.
Q: Many economists say your figures are wrong and the total national economy is worth less than you think it is, based on Federal Reserve estimates?
A: No one can say for certainty what the value of wealth in America is because so much of our wealth is privately held. Most of the countryís wealth is in real estate ó something I know a little bit about ó but different people evaluate real estate at different levels.
The point is all economists are guessing and all economic assumptions use estimates when trying to determine what a certain tax will raise on a certain income level segment of the tax payers.
The economists Iíve consulted estimate wealth in
this country at $50 trillion ó $40 trillion of that ó 90% ó is controlled
by 1% of the people. That is who I want to tax ó one time ó to get our
financial house in order.
Q: How would you pay for the repeal of the inheritance tax?
A: The inheritance tax only raises about $20 billion
a year ó thatís because the rich people know how to avoid it by spending
their wealth before they die. The economic growth caused by enacting my
debt reduction proposal would easily pay for repealing this inheritance
Q: Donít you think you are being unfair to rich people?
A: Trading a one time 14.25 % hit for a 55% hit in
the inheritance tax is a no-brainer most wealthy people I know would
take that deal tomorrow. The Inheritance Tax is really one of our most
onerous taxes. It doesnít just hurt the wealthy, it hurts small businessmen
and women, farmers and anyone who wants to leave the fruits of their labor
to their children.
Q: I have seen many economists on television saying your plan is crazy and cannot work.
A: Alan Sinai, Chief Global Economist for Primark Decision Economics and one of the most respected economists in the country told Good Morning America ďWell, (Trumpís) ideas are intriguing. It is a major redistribution if itís phased in from the wealthy, and the high-income rich, and superrich to middle-income America, and we remove the inheritance tax, which is a plus and we cut the national debt. I think the numbers are not quite right, but Iím not able to get the full $5.7 trillion in terms of the calculation.
But, you know, we donít really need to have all of
that because weíre going to have quite a large amount of surpluses anyway
with current law, and so we donít need to have that big a tax cut. So,
I think itís worth looking at, in terms of the ideas, what ó what the impact
might be on the economy and in the election 2000. But we have to decide
as a nation what to do with these budget surpluses, how to deal with Social
Security in the long-term sense. Itís worthy of examination and consideration.Ē
Donald J. Trump Presidential Exploratory Committee