Yesterday the Trump administration announced its new tax ‘plan’ in order to beat the ‘100 day’ deadline[1], by all appearances.

Trump has – and I know this will come as a shock to those of you keeping score – been on both sides of that issue. On the campaign trail he promised to do more in 100 days than any President before him, and if you ask him now, he will claim that his administration has done more than any President before him. On the other hand, just days ago he called the 100 day deadline meaningless and arbitrary, in implicit acknowledgement that his administration has accomplished almost nothing in its first 100 days, the blizzard of (mostly meaningless) executive orders notwithstanding.[2]

That may be the most truthful thing he has said during his entire reign as President.

But back to the tax ‘plan,’ if one can call it that. It was really just a double-spaced one-page outline of a tax plan, not an actual plan.[3] Calling it a ‘plan’ is being extremely charitable. Even so, let’s look at what is supposedly in it.

For individuals the tax plan would apparently

• Reduce personal income tax rates and reduce the number of brackets from seven to three: 10%, 25%, and 35%.
• Repeal the estate (or ‘death’) tax altogether
• Repeal the Alternative Minimum Tax (designed to ensure that high earners can’t bring their tax bill down to zero by invoking all manner of deductions and loopholes).
• Repeal the surcharge on capital gains.
• Eliminate certain unspecified loopholes (but apparently including the popular deduction for state and local taxes).
• Double the standard deduction.
• Increased child-care tax credits.

For businesses the tax plan would apparently

• Cut business income tax rates from 35% to 15%.
• Cut rates for ‘pass-through’ companies.[4]
• Tax foreign-held profits.
• Introduce a territorial tax system. [5]

Loyal readers of the blog may be surprised to hear me say this, but not every one of these ideas is bad. For example, bringing down the corporate tax rate – which conservatives are very fond of reminding everyone is the ‘highest in the world’ – isn’t a bad idea as long as it’s married to closing a large number of corporate loopholes. Because currently the ‘effective’ (i.e. actual) tax rate that many clever companies (like Apple, for example) is closer to zero.

Taxing foreign-held profits is another very reasonable idea.

Simplifying the number of personal rates and eliminating some deductions isn’t such a bad idea either.

But the basic problem with this tax plan is how much it would add to the federal deficit. Trump’s economists are assuming that the tax plan would generate 4.5% of annual sustained growth, which assumption more sober economists have dubbed as residing in ‘fairyland.’ Those are the kind of numbers even China hasn’t been able to sustain.

The last time we had ‘trickle down’ economics was, of course, during the Reagan administration. David Stockman, the Budget Director at the time (and chief architect of ‘trickle down’) proposal has long ago rebuked it, and admitted that it doesn’t work.  At all. The federal deficit grew like a baby cow on steroids during Reagan’s years in office.

So, here we go again.

Once Trump puts some meat on those bones, it’s going to smell just like the Republican replacement to the Affordable Care Act. In other words, not so good.[6]

[1] There is no real 100 day deadline. It’s a marker that was first set up when Franklin Delano Roosevelt, coming into office to combat the Great Depression, enacted a remarkable number of measures in his first 100 days, setting a high water mark which successor Presidents have been trying to match ever since.

[2] He did get Neil Gorsuch appointed to the Supreme Court, but needed the Senate to blow up its filibuster rule in order to get there. It was mostly an ‘accomplishment’ (if you will) by the Senate.

[3] This is the same approach that the Republicans used when releasing their alternative to the Affordable Care Act. Once they put meat on those bones, things suddenly went downhill in a hurry.

[4] Small partnerships, independent contractors, and some larger firms don’t pay corporate taxes. Instead they treat their business income more like a salary and include it with their individual income tax filings.

[5] While this aspect of the plan is particularly vague, the basic idea is to somehow stop taxing companies’ overseas earnings and focus just on their domestic operations.

[6] Since Trump has not released his own tax returns, it’s hard to know how these proposals would effect him personally, and his business as a whole. But since Trump’s business is closely held (so a private person can’t buy stock in the Trump organization), it is likely that income from the Trump organization would be treated as ‘pass through’ income, and he and his people would be entitled to report at the lower personal rates than the corporate rates.