The Trump Tax Loophole Could Be Hillary Clinton's Secret Weapon

On Thursday afternoon in Warren, Michigan, Hillary Clinton is set to deliver a major economic speech. She is expected to detail her five-point economic plan, which will address infrastructure, education, manufacturing, scientific research, yada yada yada… until she gets to the good part and sinks her incredibly uniform teeth into Trump for his economic and tax plans. Clinton is expected to pay attention to one aspect of the proposals Trump discussed, in particular, in his own economic speech in the same state on Monday, which she will affectionately refer to as the “Trump loophole.” So, what is the Trump loophole? And will you like it?

The Trump loophole will likely not be a favorite of those who might have enjoyed other Trump products, such as his hats, steaks, universities, and election seasonal depression. Plainly, the Trump loophole refers to Trump's plans to reduce corporate taxes, explained Amy Chozick of the New York Times. Out of all of Trump's tax promises, the Trump loophole is what CNBC's Robert Frank called "the biggest tax break for the wealthy."

Trump said in his speech on Monday, "Under my plan, no American company will pay more than 15 percent of their business income in taxes. In other words, we're reducing your taxes from 35 percent to 15 percent." What Trump is referring to here, wrote Allan Smith of Business Insider, is a cut in taxes on "pass-through income" — a type of business income which mostly flows to the top 1 percent of income earners in the country, according to a recent report from the Center on Budget and Policy Priorities. According to the report, this cut could "spur large-scale tax avoidance by expanding the incentive for high-income professionals to classify their income as business income instead of salary and wages." And that might be one of the reasons Clinton is expected to claim in her speech that Trump's plan will "balloon" the national debt, according to a campaign memo, as reported by Business Insider.


Though Trump claims his pro-business cut will benefit small businesses, Frank reported that most of the benefits will go to big businesses (achem, the Trump Organization), and the richest of the rich (achem, Donald Trump). Tax breaks like the Trump loophole are often played off by Republicans as intentioned to benefit middle and lower classes by way of "trickle down economics." However, the specifics of the CBPP's analysis of the Trump loophole show that "most of the pass-through companies are financial vehicles that contribute few jobs and little to the economy," wrote Frank.

According to the campaign memo, Clinton plans to attack Trump's loophole. Hard. Namely, she'll denounce it as a "regurgitated trickle-down economics of the typical Republican, but worse."

While talking about tax plans are sometimes the surest way to get Americans to tune out during an election, Clinton's wonky line of attack may be a welcome change to voters, especially when her opponent is busy making assassination insinuations.

Image: Bustle/Dawn Foster