He is promising a simplified, one-page tax form for next year that basically already exists — the 1040EZ. And after weeks of promises, Trump appears to be dropping a pledge to create an even smaller, card-size tax form. There are no signs the IRS is planning any such thing for the 2018 tax year.
Meantime, Trump’s tweet Monday accusing China and Russia of “playing the currency devaluation game” is at odds with the Treasury Department, which has not reached the same conclusion in recent economic reports.
A look at the statements and how they don’t hold up:
TRUMP: “Russia and China are playing the Currency Devaluation game as the U.S. keeps raising interest rates. Not acceptable.” — tweet Monday.
THE FACTS: Trump’s claim misstates the current economic situation and contradicts his own Treasury Department, which on Friday released a report showing no country was labeled a currency manipulator.
Trump during the 2016 presidential campaign had vowed to brand China a currency manipulator immediately after taking office. But in three straight currency reports issued since Trump took office, the administration has not branded China or any other country as a currency manipulator.
Asked why the administration has not labeled China a currency manipulator in the Treasury reports, White House press secretary Sarah Huckabee Sanders said Monday that China was placed on a watch list and “that’s something that the Treasury Department is watching very closely, and we’re continuing to monitor it.”
Trump’s tweet also inaccurately describes the economic situation. China’s currency, the yuan, has actually been rising in value and now stands at the highest levels against the dollar in about three years.
By contrast, Russia’s ruble has been falling against the dollar and did plunge sharply last week. But that reflected new economic sanctions the United States imposed on Russia — not rising U.S. interest rates or efforts by the Russian government to drive down the ruble’s value.
Trump is correct that rising U.S. interest rates could contribute to boosting the dollar’s value against other currencies by making investments in the United States more attractive to foreign investors. But U.S. interest rates are only one factor that can determine the dollar’s value against other countries.
It is not clear what Trump meant by calling the current situation “not acceptable.” It is true that a stronger dollar can increase America’s trade deficit by making American exports more expensive in overseas markets while making foreign goods cheaper for U.S. consumers.
But the Federal Reserve’s current moves to gradually raise U.S. interest rates are being taken to ensure the economy does not overheat at a time when unemployment is at a 17-year low and the economic expansion is now the second longest in U.S. history. Previous administrations have usually been careful not to make public comments about Fed interest-rate policies to protect the Fed’s political independence.
TRUMP: “This is the last time you’re going to fill out that long, complicated, horrible return. … Tomorrow, last day. Very importantly, next year, it’s going to be a simple — for the most part, one page. It may get a little bit bigger. But it will be simple and easy to do.” — remarks Monday at a business roundtable on taxes in Hialeah, Florida.
THE FACTS: Trump is promising a new one-page form that is largely in place: the 1040EZ, which has been around for years. It can be used by people who have less than $100,000 in taxable income and no dependents and who meet other criteria. Trump previously had promised a card-size tax form but now appears to be backing off that claim by describing next year’s form as “for the most part one page” that “may get a little bit bigger.”
In fact, there’s no sign that the IRS is planning new filing forms, card-size or otherwise, for the 2018 tax year. It’s been a political gimmick for years.
“The idea of radically simplifying taxes has always been more of a political talking point or sales pitch, more than it’s been part of any reality,” says Joseph Rosenberg, senior research associate at the nonpartisan Urban-Brookings Tax Policy Center.
Although many taxpayers will have an easier time filing because of the doubling of the standard deduction, they’ll still have to do legwork to figure out their taxable income and whether they qualify for the deduction or would be better off itemizing. They will also need to figure in the hit they could take from the capping of deductions for mortgage interest and state and local taxes.
That means pages of data and tables to consult, even if some kind of shorter form is in the future.
At any rate, the overwhelming majority of Americans now file their tax returns electronically, which is how they simplify. The idea of dropping a postcard-type paper with personal financial data into the mail seems old-school.