Donald Trump's Tax Plan 'Out-Bushes Bush'

Critics were quick to jump on the new tax proposal unveiled Monday by GOP front-runner, real estate mogul and reality TV star Donald Trump – a plan that "removes nearly 75 million households" from paying income taxes, restructures domestic tax brackets, removes certain deductions and loopholes and scraps the so-called "death tax" associated with inheritance.

"It is a fraud – a total fraud," Al Hunt, columnist and commentator at Bloomberg, said in response to the tax proposal on Bloomberg's "With All Due Respect" Monday. "He's going to massively increase defense spending, and then he's going to have a huge revenue-losing tax plan. Guess what? There's a lot of debt there."

The primary criticism: Despite Trump's claims that the plan is "revenue neutral," few see how that could be a realistic possibility given the extent of the tax cuts.

"He said he would eliminate deductions, but there aren't enough deductions around to reduce the rates that low without making a huge increase in the deficit," John Harwood, chief Washington correspondent for CNBC and a writer for The New York Times, said in an interview Monday on CNBC. "No one can look at this tax plan and think that it would be revenue neutral."

Trump's plan will allow single workers who earn less than $25,000 annually, and married couples with joint incomes of up to $50,000, to bypass income taxes altogether. The seven current tax brackets would be consolidated into four, with the highest earners paying only 25 percent in income taxes, down from the current rate of nearly 40 percent.

"We have an amazing code. It will be simple. It will be easy. It will be fair," Trump said Monday as he announced his new proposal. "I did the plan with some of the leading scholars and economists and tax experts that there are in this country. They love it. They say, 'Why hasn't this been done before?'"

Corporate taxation would also be tweaked, and Trump maintains that workers across the board would generally pay less in income taxes than they do now.

But such a tax break doesn't come without a cost to the U.S. budget, considering the government's overall reliance on tax revenues. An analysis released Monday by the Citizens for Tax Justice organization noted that the plan "is missing some details" but would ultimately "cost more than $10 trillion in its first decade."

"Trump claims the plan will be revenue neutral, but he has made bombastic exaggerations before, and this time is no different. In fact, there is no possibility that this plan would not be a gigantic tax cut for the rich and a gigantic revenue loser for the government," Robert McIntyre, director of Citizens for Tax Justice, said in a statement Monday. "The most widely promoted tax hike in Trump's plan, closing the carried interest loophole, would barely amount to a slap on the wrist for hedge fund millionaires Trump says should pay more."

Trump in the past has vowed to take on the national deficit, which he has said is comparable to "Greece on steroids." And while his plan could potentially amount to trillions of dollars in losses if implemented without any other governmental changes, Trump says the spending cuts he'll implement, in conjunction with the elimination of certain deductions from the U.S. tax code, will more than make up for the country's reduced pool of tax revenue.

"We have to cut the costs of what's going on in this country," he said Monday. "We will run this country properly. There is so much money to be saved. We're reducing taxes, but at the same time, if I win, if I become president, we will be able to cut so much money and have a better cut. We won't be losing anything."

And while many are skeptical about his math, The Donald is not without allies. Grover Norquist, founder of the Americans for Tax Reform nonprofit, called the plan "Republican orthodoxy, with a little twist here and there." Conservative radio host Mark Levin called it a "hell of a plan." Fox television personality Eric Bolling, whose employer has had a less than amicable relationship with Trump in recent weeks, gave the plan "an A-plus."

"I really wanted to not love this tax plan," he said. "But it's fantastic."

Trump's ideas are firmly rooted to the right of the political spectrum, and many point out that it's nearly impossible to fact-check Trump's plan as is to see how much fiscal damage it could do. The full details of the cuts he wants to make haven't been released yet, but many suggest that Trump is on the right track.

"It has to be scored. It has to be worked out. You have to look very carefully at how they do their computations," says Peter Morici, an economist and professor at the University of Maryland. "I think it could go through. I think it's realistic. And it's going to take something radical like this to jump start this economy. We just can't go on growing at 2 percent, or we're not going to be able to afford the old folks and the military and all the rest."

Morici says Trump's plan shouldn't be immediately discounted just because of the "bombastic" and "outrageous" things he's said in the past. The bottom line, Morici says, is there's "a lot of good" in this plan.

"There's going to be a lot of support. For example, taxing the interest on insurance policies and things like that, that needs to be done," he says. "This is not a simplistic program. This is not something off the cuff. This is well thought-through, substantive. He has answered his critics with this. I don't see Carly [Fiorina] coming up with something like this. I don't see Ben [Carson] coming up with something like this."

Trump's plan isn't so different from the one touted by GOP rival Jeb Bush, despite the apparent animosity that exists between the two presidential hopefuls. Both reduce the number of tax brackets in the U.S. Both involve tax breaks for the country's top earners. Both specifically target loopholes that allow the well-connected and savvy to navigate around paying their full share of taxes.

"[Trump's plan] really out-Bushes Bush. It outdoes the professional politicians, because he's lived inside the belly of the whale. He's had to live with the damn tax codes to do business," Morici says. "Say what you want. He's gotten richer doing it. That's the bottom line in America."

Trump, no stranger to tooting his own horn, highlighted this point as he unveiled the plan Monday.

"This is my wheelhouse. This is what I do well," he said. "The economy is what I do well."