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Trump unveils tax plan that promises cuts for everyone

Businessman Donald Trump, a candidate for the Republican

Businessman Donald Trump, a candidate for the Republican presidential nomination, rolls out his tax proposal on Monday, Sept. 28, 2015 in Manhattan. Credit: AP / Julie Jacobson

ALBANY - ALBANY -- Republican presidential candidate Donald Trump promised deep tax breaks for just about everyone and every business with a 20-percent cut in federal spending to help pay for it in his long-awaited economic proposal delivered Monday.

"It will be simple, it will be easy, it will be fair," Trump said of his plan, which he said also would cost him "a fortune" by eliminating some of the tax breaks and loop holes enjoyed by the rich.

Under the plan, individuals making less than $25,000 and married couples making less than $50,000 would pay no federal income tax, while most others would save $1,000 a year, he said.

The corporate tax would drop to 15 percent, from 35 percent. The highest income tax would also be cut to 25 percent, from 39.6 percent, but Trump said he intends to make sure the loopholes will be eliminated to wealthy hedge fund operators, and others avoiding any tax will be paying federal income taxes.

Trump said the cuts will rev up the nation's economy by 3 percent to 5 percent a year to help pay for the lost tax revenue. He also would rewrite "unsustainable" trade treaties and charge countries "massive" fees for U.S. military protection.

"Our country spends its money so stupidly," he said. "I will be able to cut, without losing anything, tremendous amounts."

Trump called it a "common sense" plan, but economists' views differed.

"It's a huge tax cut and there's no way it could be revenue neutral," said Alan Auerbach, professor of economics and law at the University of California at Berkeley. He said Trump's "horse-and-rabbit stew" of revenue raisers wouldn't balance lost tax revenue.

Trump wouldn't identify the economic experts he used to formulate the plan.

Others said Trump offers a bold plan when a bold plan is long overdue.

"It seems to be more radical than what the other Republicans are offering and, frankly, better," said economist Peter Morici, a professor of international business at the University of Maryland.

Former Florida Gov. Jeb Bush has proposed cutting the current seven tax brackets to 10 percent, 25 percent and 28 percent, allowing 15 million Americans to pay no federal income tax.

Trump would make tax brackets zero, 10 percent, 20 percent and 25 percent, allowing 75 million Americans to avoid federal income taxes.

Morici agreed Trump's plan would heat up the economy by undoing measures taken by President Barack Obama.

"Mr. Obama is satisfied with 2 percent growth," Morici said. "Two percent is good enough for milk, not growth. Donald Trump's plan is cream."

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