Symposium

0 Comments | Insight on the News, Jan 3, 2000 | by Donald Trump, | Howard Phillips

Q: Would a one-time wealth tax on megamillionaires be good for America?

Yes: My plan would make the U.S. debt free, cut taxes and shore up Social Security.

Trump is a New York-based real-estate developer and investor as well as an author and may seek the presidential nomination of the Reform Party.

There's been some very heavy breathing over my plan to levy a one-time, 14.25 percent tax against the super-rich to retire the national debt. The complaints come from the usual suspects, left and fight. Former Labor secretary Robert Reich says there's "absolutely" no way the plan can succeed. Multimillionaire power pundit Bob Novak all but calls me a traitor to my class. How clare a guy with $5 billion presume to know anything about retiring the national debt, much less cutting taxes, securing Social Security, ending the inheritance heist and creating the most immense economic boom in American history. What could I know that they don't?

For starters, I know what's really at the heart of objections to the Trump national-debt reduction plan: America's governing class heard the approaching footsteps of a political revolt it doesn't understand and, most frightfully, can't control. Members of this bumbling elite have watched with horror as nonpoliticians such as Minnesota Gov. Jesse Ventura have been elected to high office. Now comes a potential presidential candidate from outside the party duopoly with a plan to accomplish goals all Americans desire. The duopoly is not objecting so much as panicking. If this keeps up, its presidential candidates will have to come up with their own plan. The bill for the pollsters and focus groups will be staggering -- and the result will be a toothless rehash of the status quo. I know that, they know that, and so do the voters.

Despite the hyperventilating, nobody has laid a glove on the essence of this idea. Instead, they are reduced to attacking my "assumptions" and estimates of revenue that would be raised -- ignoring the fact that we have a tax system under which people who make more and have more pay more.

Having built a billion-dollar business, I have extensive experience in dealing with economists, and this I know: They all are guessing and no two economists ever agree on anything. The word "assumptions" means exactly that: All economic forecasts are a guess. It is impossible for anyone to tell us the exact value of wealth in America, largely because most of it is privately held and most of that is in real estate, the value of which I know a little bit about.

As the noted economist Allen Sinai told ABC's Good Morning America, it's not important whether my estimates are correct because our current surpluses would have to be counted in any effort to retire the national debt. It is the idea that is important, an idea that Sinai called "innovative and interesting" and "worthy of consideration."

My plan is very simple, and it really could work. By eliminating the national debt, we would save $200 billion a year in interest payments, half of which would be used to secure Social Security while the other half would go to a middle-class tax cut.

By eliminating the 55 percent inheritance tax, citizens would be able to leave the fruits of their life's labor to their children and grandchildren instead of the IRS. As a person of wealth, I can tell you I'd rather take a onetime 14.25 percent hit now than a 55 percent hit later. But make no mistake about it, the inheritance tax hurts more than just the wealthy; it also hurts the small businessmen and women as well as farmers and anyone who has built up a nest egg to pass on to their children.

In short, my plan will end four major problems -- our gnawing national debt, a shaky social-retirement system, high taxes on the middle class and a hideous death tax -- while creating a single huge benefit: The most dynamic economy in the history of civilization. All the boats in the pond will be raised, and many will turn into yachts.

Doesn't sound like a tragedy to me.

I am willing to bet a great deal of my own money on this plan. My share of the contribution would be somewhere around $700 million, which I gladly would pay -- not because I am a closet altruist but because the plan is good for all Americans, including Donald Trump. I really believe I would make my money back from the resulting economic boom since my companies would thrive in the most dynamic economy in our history.

Some Wall Street economists say that my plan cannot work because the wealthy are not liquid and that my plan would cause a major sell-off of stocks as the rich get liquid to pay their tax liability. This problem can be solved by allowing the wealthy to pay their tax obligation over a 10-year period -- as long as government knew it could count on the revenue for debt reduction.

Other critics insist that the megawealthy will send their money offshore. They once again are wrong. With rare exceptions, rich people are good at making money and quickly will realize they are going to do unbelievably well in a debt-free, low-interest, opportunity-rich America. In fact, they'll think they've died and gone to Hong Kong -- except our economy will be even hotter.