Donald Trump’s campaign last week eliminated any mention of one of his major tax proposals -- a proposed tax cut that would benefit private-equity funds and hedge funds -- from his published plan.

Now, after conflicting statements from Trump’s advisers, an independent economist who has worked closely with Trump’s campaign to review its tax proposals says he can’t tell if that tax cut is alive or dead.

“This ambiguity is a big deal,” said economist Alan Cole, of the Tax Foundation, a Washington-based tax policy group.

The Tax Foundation took the unusual step Monday of issuing a range of potential costs for Trump’s tax plan. Without the cut, which would benefit businesses from mom-and-pop grocers to hedge funds, the plan would cost $4.4 trillion over the next decade, before accounting for economic growth. With it, that cost would be $5.9 trillion -- $1.5 trillion more than Trump cited last week.

‘Never Changed’

Despite an e-mail exchange with Cole in which a Trump adviser indicated the campaign changed its position on the tax cut, Stephen Miller, another senior policy adviser to the campaign, said in a statement Monday evening that: “Our position has never changed.” Miller said the campaign had added “safeguards to make sure no one can abuse the system by applying this lower rate to non-business income.”

Adding to the confusion, the campaign on Monday morning posted a brief statement titled “Trump policy on business taxes” to its website, but then soon removed it. The statement said businesses could choose how they wanted to be taxed, according to a screenshot made before it was withdrawn.

Stephen Moore, an economist who has been advising Trump, said little to clarify the situation Monday. The campaign will work on the issue with the Republican-led House Ways and Means Committee, which writes tax policy, he said.

At issue is whether Trump’s call for a 15 percent tax rate would apply not just to large corporations known as “C corporations,” but also to partnerships, limited liability companies and other businesses known as pass-throughs. The pass-through structure is a mainstay of both small businesses and investment partnerships. Such businesses don’t pay income taxes, but pass their earnings through to their owners, who then pay taxes at their individual rates. Because the current top rate is 39.6 percent, Trump’s proposal represented a major tax cut for many pass-through businesses.

‘C Corporations’

The original proposal had also represented an attempt to align tax rates for small and large businesses. Trump has proposed a 15 percent rate for C corporations -- down from the current top statutory rate of 35 percent. Now, according to the foundation’s analysis, the plan is unclear.

“As of today, the campaign is unclear as to whether it will apply its 15 percent corporate rate just to traditional C corporations, or to both C corporations and pass-through businesses,” the Tax Foundation said in a statement that accompanied its new analysis Monday morning.

Bloomberg News and other news outlets reported last week that Trump had dropped his proposal to create a new 15 percent tax rate on business income from partnerships and other pass-throughs from the latest version of his plan.

Cole, of the Tax Foundation, said Trump’s campaign told him via e-mail on Thursday that, going forward, “the 15 percent rate only applies to businesses that are taxed as corporations.”

Initial Estimate

That day, Cole released an initial cost analysis for Trump’s latest plan of $4.4 trillion, before considering the effects of economic growth. That number, which Trump also cited in a Thursday speech to the Economic Club of New York, was based on calculations that didn’t include the special pass-through tax rate.

But the New York Times reported Friday that Trump’s campaign had assured the National Federation of Independent Business, which represents small businesses, that Trump remained committed to the proposal. Confusion reigned through the weekend as Trump’s advisers said in statements to various media outlets that small businesses could indeed use the 15 percent rate.

“This rate is available to all businesses, both big and small, that want to retain the profits within the business,” said a note on the website.

But if businesses retain profit, they are no longer operating as pass-throughs; instead they’d resemble regular corporations. In his latest analysis Monday, Cole of the Tax Foundation acknowledged the lack of clarity and sought to sort it out.

Two Estimates

The policy group released two cost estimates: the first, $4.4 trillion, applies if pass-throughs do not get the 15 percent rate, Cole wrote. The second estimate, $5.9 trillion, “assumes businesses must incorporate and pay shareholder-level taxes in order to take advantage of Trump’s 15 percent business rate,” the foundation’s news release said.

The analysis entertains the possibility that “the Trump plan would allow more businesses to file their taxes in the way that C corporations do, even if their legal structure today would have them pay taxes as a pass-through.”

If that hybrid approach is what Trump is proposing, partnerships would pay 15 percent before distributing earnings to their owners -- and the owners would pay a 20 percent tax on those dividends, according to the Tax Foundation analysis.

“It is not immediately clear that pass-throughs would benefit from adding a second layer of taxation by opting for the 15 percent tax on their retained earnings,” the analysis found.

Withdrawn Statement

A statement that was posted to Trump’s website on Monday morning -- and then withdrawn -- addressed that concern. It said, first, that businesses could “elect to be taxed using the business tax rate of 15 percent or ordinary individual income rates.” (Trump has proposed consolidating the existing seven individual income rates to just three: 12, 25 and 33 percent.)

It also said: “Small business owners who elect to be taxed at the 15 percent business tax rate will not face double taxation. Owners of large businesses will incur dividend taxes.” The statement didn’t describe how tax officials would differentiate between large and small businesses. “Final details would be negotiated with Congress,” it said.

It’s unclear whether the statement, which was removed from the website, represents a valid statement of Trump’s policy. It was reported earlier today by Bloomberg BNA.

‘Dynamic Scoring’

Miller, the Trump policy adviser, said in his statement that the campaign believes the correct 10-year revenue cost for Trump’s plan is $2.6 trillion -- a figure that’s based on so-called “dynamic scoring,” which accounts for anticipated economic growth. Cole’s analysis on Monday arrived at a dynamic scoring result of $3.9 trillion, if the pass-through provision is indeed unchanged.

Trump has altered his tax plans since last year, when economists said his initial proposal would carry a 10-year revenue cost of roughly $10 trillion. The latest version would give fewer benefits to the middle class compared with his original plan, the Tax Foundation’s analysis found.

Trump’s earlier plan offered workers who rank in the middle quintile -- that is, between 40 percent and 60 percent -- in terms of income roughly 6 percent more after-tax income than they receive currently, the analysis said. The new plan offers them only 1.3 percent more after-tax income, according to the analysis.

1 Percent

By comparison, the top 1 percent of income earners would have seen a 20.7 percent increase in their after-tax income under Trump’s original plan; the new plan would provide an increase of either 10.2 percent or 16 percent -- depending on how pass-throughs are taxed. The bottom 20 percent of earners would fare better under the new plan -- they’d receive a 1.2 percent boost in their after-tax incomes, up from 0.7 percent originally -- due to a childcare tax benefit Trump added to his plan this month.

While campaigns routinely tweak their policy proposals, they typically do so behind the scenes through internal deliberations before disclosing a formal, published plan. Trump’s campaign instead stirred a weekend full of confusion among policy analysts regarding its pass-through plan.

‘Coherent Proposal’

“You need a bunch of smart, experienced tax people thinking these things through and talking to practitioners on the ground,” said Michael Knoll, a tax law and tax policy expert at the University of Pennsylvania Law School. He added: “That didn’t appear to be happening.”

Until the campaign provides more detail, it’s not clear how businesses should respond, Knoll said.

“It’s hard right now to say how much they’re trying to come up with a coherent proposal, as opposed to a politically palatable one,” he said.

Cole, the Tax Foundation economist, posted a note to the group’s website Monday explaining why the group had to issue a range of estimates for Trump’s plan.

“Put simply, we do not understand how non-corporate businesses would be taxed under the Trump plan,” he wrote. “This isn’t for lack of trying.”

The foundation’s not alone. Brian Reardon, president of the S Corporation Association, a lobbying group for pass-through businesses, said Monday that “we’re not sure what the plan is, so what we’re going to do is continue to push the pass-through mantra” for taxing pass-through businesses at the same rate as corporations.

“Plans that do that, we like. And plans that don’t, we don’t,” said Reardon, who was the principal tax aide for former President George W. Bush’s National Economic Council.

This article was provided by Bloomberg News.