Economists at the Tax Foundation, which Trump asked to evaluate the likely effects of his evolving plan, said on Thursday that campaign officials instructed to make the change — a move those economists said reduced the budget cost of Trump's proposals by between $1 trillion and $2 trillion over a decade.
The Trump campaign could not immediately be reached.
Trump's original proposal, and even a revised version released this summer, would have dramatically cut tax rates for so-called "pass-through" entities. That's a form of corporate structure that allows owners of a business to pay taxes on their profits at individual income tax rates, instead of the corporate tax rate. It's a popular structure for many small businesses — but increasingly for financial firms, as well, and for the companies in Trump's business empire.
On his presidential financial disclosure report, Trump listed holdings of more than 200 limited liability corporations, which is a form of pass-through.
The Washington Post reported on those potential effects for Trump's companies in August. Independent analysts called the plan a "sweet deal" for the candidate, and the pass-through plan drew criticism from groups such as the Center for American Progress, a liberal think tank. Trump's opponent, Hillary Clinton, labeled the provision the "Trump loophole," derisively.
Trump originally proposed to allow pass-through entities, like traditional corporations, to pay a 15 percent business tax rate, which is well below today's corporate rate and top individual income tax rates.
"This lower tax rate cannot be for big business alone; it needs to help the small businesses that are the true engine of our economy," his campaign said in a fact sheet about the initial version of his plan. "Right now, freelancers, sole proprietors, unincorporated small businesses and pass-through entities are taxed at the high personal income tax rates. ... The Trump plan addresses this challenge head on with a new business income tax rate within the personal income tax code that matches the 15 percent corporate tax rate to help these businesses, entrepreneurs and freelancers grow and prosper."
On Thursday afternoon, the newly updated tax reform section of Trump's website had dropped all references to pass-throughs. Its corporate tax section was amended: "The Trump plan will lower the corporate tax rate from 35 percent to 15 percent, and eliminate the corporate alternative minimum tax," it read.