Taking a closer look at Donald Trump's promises in new ad

A new ad from Donald Trump promises tax cuts for the middle class and businesses. (Internet Archive)

Florida is crucial to Donald Trump’s chances of winning the White House, and the Republican nominee is hoping a new television ad helps sway voters in the battleground.

The ad explains what electing Trump means — claiming lower taxes for middle-class families and businesses, along with paid maternity leave and a bigger childcare tax credit.

How much of it is true?

PolitiFact Florida wanted to take a closer at each proposal to find out.

Promise 1: Families making $60,000 a year get a 20 percent tax-rate reduction

The phrasing of this promise is a little misleading, and it’s not included verbatim in Trump’s tax plan.

This pledge is actually referring to Trump’s plan to collapse the current seven income tax brackets and establish three tax rates of 33 percent, 25 percent and 12 percent.

So where does the 20 percent reduction fit in? It takes a little math. The current tax rate for people who make between $18,451 and $74,900 and are married, filing jointly, is 15 percent. Trump’s plan would lower that tax rate to 12 percent. So, a 3 percent decrease translates to a 20 percent reduction.

Roberton Williams, a Sol Price fellow at the Urban Institute, said the promise in the ad is a case of Trump looking to describe his plan in the best possible light.

It’s just as correct, for instance, to say that tax rates for some low-wage workers will increase 20 percent.

Here’s how. If you look at single households making between $15,000 and $19,625, the marginal tax rate under Trump’s plan goes up from 10 percent to 12 percent. Williams also noted that a lot of single parents with children would see their taxes go up under his plan because he gets rid of head of household filing status, which allows single parents to see lower tax rates.

Promise 2: Working moms get paid maternity leave

When you read the actual wording of the promise, it can be hard to determine who would be eligible for the maternity leave. Here’s how it appears within the campaign’s child care report:

"The Trump plan will enhance Unemployment Insurance (UI) to include 6 weeks of paid leave for new mothers so that they can take time off of work after having a baby," his plan says.

Trump campaign's website also mentions that same-sex couples would receive the six weeks of paid leave if their marriage is "recognized under state law."

We reached out to Trump’s campaign for clarification of who would be eligible, but we didn’t hear back.

Taryn Morrissey, assistant professor in public administration and policy at American University, said this promise could work and pointed to California and New Jersey, which currently have paid leave systems that provide six weeks of partial pay.

But there are shortcomings of this pledge. For instance, the plan applies only to mothers, and Morrissey said employers might be less likely to promote women as a result of the proposal.

"This is problematic for gender equality at work and in the home, and for child development reasons" she said. "Employers may be dissuaded from hiring women versus men in their childbearing years, as they'll have to cover women's work when they take leave."

Promise 3: Working moms get a $5,000 child care tax reduction

Trump’s plan allows parents to deduct the cost of child care from their taxes.

According to Trump’s campaign website, child care costs will be excluded from income taxes from birth age to age 13. This exclusion is called the "above-the-line deduction" and will cover up to four children, at the average cost of child care per state.

The deduction would also apply to costs associated with family members taking care of elders (up to $5,000) outside of the home, such as adult day care costs.

The ad refers to this as a reduction, but it’s actually a deduction.

"Literally, a reduction would mean a credit, dollar for dollar," said Edward McCaffery, a tax law professor at the University of Southern California Law School. "$5,000 for every working mom would be huge and hard to finance."

He agreed that this is more than likely a deduction, which means working mothers would save money at a marginal rate. For example, if a taxpayer is in the 12 percent bracket and the average cost of child care was $5,000, then the working mother would save $600.

McCaffery, who has been critical of Trump’s tax plan, directed us to an article he wrote for CNN that points out another flaw in this proposal.

"Most working mothers, on the other hand, would not pay federal income tax under Trump's proposal; almost half of American households currently do not," McCaffery wrote. "No matter how large their child care costs may be -- and no matter how much they struggle to pay them -- something (the child care costs) times nothing (the income tax rate) is always nothing."

Promise 4: Business owners’ taxes get cut from 35 percent to 15 percent

Trump’s campaign website dedicates a whole section to this talking point. What’s said on the website doesn’t deviate from what the ad claims, but there are some intricacies worth exploring, like what business this new rate would apply to.  

Experts said that this plan would only apply to the top corporate tax rate, cutting rates from 35 percent to 15 percent.

Williams mentioned a smaller group of businesses called S corporations that have specific rules — the firm can’t be that big, it can’t exceed a number of shareholders, and so on — along with partnerships, limited liability corporations and sole proprietorships, whose income is taxed through the individual partners and owners.

Williams called this type of taxing "pass through." For instance, law firms make money, but the money goes to the partners of the law firm, and the partners of the law firm report the profits as income on their individual tax returns.

That type of income is subject to regular income tax rates (not the 35 percent rate, but a individual rate that maxes out at 39.6 percent).

Trump initially proposed initially allowing these pass through entities to see their tax rates drop from 39.6 percent to 15 percent. But Trump changed his plan in September.

The Tax Policy Center, which is based in Washington, released a report on Trump’s tax plan Oct. 11, which concluded that lowering the corporate tax rate to 15 percent would reduce federal revenue by $2.4 trillion over the next ten years.