SANTA FE, N.M. – Donald Trump's wealth has helped define the 2016 presidential race and it is also shaping the campaign's tax debate.
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Trump contends he has the expertise to fix the tax code and close loopholes like the ones that may have let him go nearly two decades without paying federal income taxes. Hillary Clinton, he said in the last debate, won't. "She complains that Donald Trump took advantage of the tax code," Trump said. "Well, why didn't she change it?"
But Clinton now is proposing changes to the tax code that would bite into the developer-turned-presidential candidate's bottom line and that of his family, including limiting one provision that many in Trump's industry use. Trump, meanwhile, is proposing changes that would benefit wealthy families like his — as well as the Clintons.
A new analysis from the Urban-Brookings Tax Policy Center found that Clinton would dramatically raise taxes for the wealthy — the average member of the top 0.1 percent would pay more than $800,000 extra under her plan. Trump, by contrast, would cut taxes largely across the board, but far more dramatically for the wealthy — typical members of the top 0.1 percent would see incomes rise by more than $1 million.
"In almost every meaningful respect these plans are mirror images," said Len Burman, a former Treasury official under President Bill Clinton who is director of the center, a joint project between two nonpartisan Washington think-tanks.
The Trump campaign released a statement from policy director Stephen Miller slamming the Tax Policy Center analysis as illegitimate, but did not respond to questions about how the plan would affect the candidate's own taxes.
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Trump would eliminate the estate tax on large inheritances, a potential windfall for his heirs, while Clinton would increase it from 40 percent to 65 percent. Both candidates propose taxing capital gains at death, which would potentially eat into what they would leave their children.
But Trump would cut capital gains taxes, lower taxes on top earners from 39.6 percent to 33 percent, reduce corporate rates to 15 percent and potentially create a new loophole that could help people in his financial situation.
Breaking with precedent for a presidential candidate, Trump has refused to release his tax returns. That makes it difficult to determine precisely how his tax plans could benefit him and his family. But The New York Times obtained three pages of state returns in 1995 in which he claimed a loss of more than $900 million — which could have allowed him to avoid paying federal income taxes legally for as many as 18 years.
"Of course I do," Trump said when asked in their second debate if he used the loss to avoid paying taxes.
Tax experts say there's good reason the tax code lets businesses and their owners deduct losses from future earnings — it encourages investment and smooths out bumps in the business cycle. The problem is when taxpayers can use loopholes to claim larger losses on their tax returns than they suffered in reality.
"Real estate businesses are often in a tax loss position even as they're making money," Burman said. Their property can increase in value while they can claim losses from wear and tear on the buildings. And rather than pay taxes on the increases on their property, developers can trade them with other businesses for no tax liability.
Clinton would limit these "in-kind swaps" to $1 million in assets annually. "Her plan would actually have more effect on the real estate business than Trump's plan," Burman said.
Trump's plan could benefit his industry and family in another way. He'd allow so-called pass-through firms to pay taxes at the lower 15 percent rate. Currently those businesses — sometimes small, but sometimes large partnerships — pay at personal income tax rates. Tax experts say business owners like the Trumps could reincorporate firms to take advantage of the clause.
The Trump campaign says "large" businesses would have to pay an additional 20 percent tax on dividends paid out to shareholders, and safeguards would prevent abuse of the rule. But it has refused to detail those safeguards.
"We may never get this clarified," said Alan Cole, an economist at the Tax Foundation who has studied the candidates' proposals. "But the more you could keep everything at 15 percent, the bigger the deal this is."
The Tax Policy Center's new analysis found that Trump's proposals would focus on reducing tax on capital, which would encourage more work, investment and savings. It said Clinton's proposals could have the opposite effect by hiking up levies on capital. However, the analysts said Clinton's proposed new spending could offset some of the negative economic impact of high-end tax increases.
Clinton's tax increases would fall almost exclusively on businesses and taxpayers in the top 1 percent, with modest tax cuts for poorer households.
Trump would cut taxes for most, but not all, Americans. The analysis found Trump would cut the average tax bill by $2,940, or 4.1 percent. But those in the top 0.1 percent would have their bill reduced by 14 percent, or $1.1 million.
Because of the way it changes standard deductions, the Trump proposal would actually raise taxes for an undetermined number of middle-class and lower-income households that have many children or are headed by a single parent, the analysis found.