Over at Politico this morning, Michael Lind has an interesting item out that suggests Donald Trump “exposed the Tea Party.”
One line, very early in the piece, jumped out at me. Lind is quoting Trump here:
“People as they make more and more money can pay a higher percentage” of taxes.
Lind didn’t use an ellipsis (…) after percentage to show that he was cutting up the quote. This is a bit sloppy.
Here’s what Trump actually said on Sean Hannity’s show:
TRUMP: I actually believe that people, as they make more and more money, can pay a higher percentage, OK?
HANNITY: How high?….What’s the cap?
You can read the full exchange here, but Trump doesn’t answer the question, other than to suggest that hedge fund managers can afford a tax increase. (This as some surmised, and later was confirmed, had to do with the “carried interest” tax rate, which is lower than the personal income tax rate a hedge fund manager would typically pay.)
This is not a defense of Trump. He didn’t answer the question with specificity, so we still don’t really know. And specificity is a problem area for Donald.
I know what you’re thinking — who cares? “‘a higher percentage’ of taxes” vs. “‘a higher percentage’ in taxes” are six and one half-dozen of the other, right? Nope, not necessarily.
Since raising taxes is generally a no-no for the political right, a distinction is important.
To say one wants wealthier people to pay “‘a higher percentage’ of taxes” is to suggest — assuming we’re only talking income taxes — that you want their contributions to represent a higher percentage than present of the total amount of taxes that are collected.
Of course, when it comes to income taxes, the top 50% of taxpayers pay 97% of all federal income taxes. The top 1% pay 38% of it.
Now, saying one wants wealthier people to pay “‘a higher percentage’ in taxes” is saying you want to raise rates on individuals as they get wealthier, or change the tax treatment of certain types of income (like carried interest or investment income) so it is treated as ordinary income.
So, what’s the distinction? Well — Trump’s views are still a mystery, but Lind inadvertently put words in Trump’s mouth by butchering the quote.
Conservatives, rightly, claim that when you tax something, generally, you get less of it. It’s not an absolute principle, but it’s generally correct. (To those who disagree, why, then are cigarette sales declining? Could it be a $1 per pack tax increase Obama signed? OK.)
In some instances, raising taxes on certain activities or on certain individuals, could ultimately result in less of that activity or individuals doing less work. It could even result in lower tax revenues than at lower rates.
The distinction between a higher percentage of all taxes and a higher percentage in tax rates is real. But Trump still hasn’t made it clear, and Lind (wrongly, though probably unintentionally) tried to make it clear.
I guess we’ll find out when Trump releases his tax plan. Though, if it’s anything like his immigration plan, don’t expect many specific details.