An ill-informed Facebook post went viral this week that claims Donald Trump’s tax proposal would affect middle class earners bigly, making them millions of dollars over the next few decades when compared to Hillary Clinton’s proposal. But at best, that’s a pipe dream. At worst, it’s a lie. Sad!
A comforting fallacy
The upside to social media is that everyone has a platform. The downside is that misinformation goes unchecked and spreads rapidly as if it’s factual. This post by K.C. Jones, which has over 100,000 shares, exemplifies the latter:
I compared Hillary Clinton and Donald Trump’s tax plan to see how it would effect me as a middle class tax payer. Here’s the break down assuming I can get my deductions to bring me down to $75,300 of taxable income.
Hillary Clinton places that salary in a 25% tax bracket which translates to me paying around $724.00 in fed tax a paycheck. That’s around $1,448.00 a month or $18,825.00 per year in fed taxes.
Donald Trump places that salary in a 10% tax bracket which translates to me paying around $290 in fed tax a paycheck. That’s around $580 a month or $7,530.00 per year in fed taxes.
Donald Trump’s tax plan would put an extra $434.00 a paycheck in my pocket every paycheck. That’s about $868.00 a month or $11,284.00 per year in extra money.
If I were to invest that $434 each paycheck into a mutual fund with an average interest rate of %10 I would have….almost 2 million dollars when I retire in 30 years…..
Think about that when you consider who you are going to vote for in November. An extra $870 a month can go an extremely long distance in most people’s households.
It’s hard to tell if he sincerely believes a Republican president will make him $1.8 million, or if he only wants his followers to believe it so they’ll vote for Trump. I’m not sure which is worse. Either way, let’s take a closer look.
First, this guy has no understanding of tax brackets. Like too many people, he purports that once he reaches a 25% tax bracket, his entire income will be taxed at 25%. No, dude, please Google “how do tax brackets work”. He destroyed his entire argument right off the bat. In fact, since he estimates his annual income at the very beginning of that bracket, exactly none of it would be taxed at 25%, and his overall tax rate would be about 13%.
Second, he cites Trump’s tax proposal from Trump’s own website, but he cites Hillary’s supposed tax proposal from the conservative think tank website Tax Foundation. In other words, he compares a first-hand source with a more dubious second-hand source that exists to confirm his biases and may not even reflect reality for all we know.
Third, he makes a trifecta of lofty assumptions—particularly, that Congress would even pass a tax plan that would send the national debt soaring to astronomical new heights, that a tax bracket of 10% on his income level would be sustainable for 30 years, and that he would achieve an annual return of 10% from a generic mutual fund that doesn’t require him to take risks in the stock market.
For the love of money
Now, after all this, a larger question remains: Even if a Republican tax plan would let you keep a little more of your paycheck, would it be worth it in exchange for a demagogue president who demonstrably has no clue what he’s doing, would turn this entire country into a laughing stock on the world stage, and would be surrounded by advisers who’d make it their mission to take away as many rights from as many marginalized groups as possible? If so, maybe you need to ask yourself why the only person who matters to you… is you.