Speech: Trump Promises to Ignite Economic Growth by Streamlining Regulations, Tax Code

By Dustin Siggins Published on August 8, 2016

Republican presidential nominee Donald Trump touted a new tax plan on Monday, with a change from a previous proposal that one of his advisers said was inspired by criticisms of the candidate’s original plan.

“My plan will reduce the current number of brackets from 7 to 3, and dramatically streamline the process,” said Trump, speaking in Detroit. “We will work with House Republicans on this plan, using the same brackets they have proposed: 12, 25 and 33 percent. For many American workers, their tax rate will be zero.”

Promises of Lower Rates and Fair Shares

CNBC contributor and Trump campaign adviser Larry Kudlow said that the 33 percent bracket was increased from 25 percent to offset projected deficits that could result from Trump’s overall original plan. The Tax Policy Center had projected that plan would produce $10 trillion in additional debt over a 10-year period. Under the new plan, said Kudlow, the effect on the national debt will be less than $3 trillion.

The new plan raised lower tax brackets from 10 and 20 percent to 12 and 25 percent. It would reduce the corporate tax from 35 percent to 15 percent.

In his speech, Trump contrasted his plan to the tax hikes under Democratic nominee Hillary Clinton. “Hillary Clinton — who has spent her career voting for tax increases — plans another massive job-killing $1.3 trillion-dollar tax increase. Her plan would tax many small businesses by almost fifty percent,” said Trump.

In the GOP nominee’s plan, “The rich will pay their fair share, but no one will pay so much that it destroys jobs, or undermines our ability to compete. As part of this reform, we will eliminate the Carried Interest Deduction and other special interest loopholes that have been so good for Wall Street investors, and people like me, but unfair to American workers.”

The top one percent of earners paid 34 percent of their income to taxes in 2013, compared to three percent paid by the bottom 20 percent of earners.

“Tax simplification will be a major feature of the plan,” continued Trump. “Our current tax code is so burdensome and complex that we waste 9 billion hours a year in tax code compliance.” Americans will spend an estimated 8.9 billion hours on tax compliance this year, and compliance will cost the U.S. economy $409 billion.

The Future Clinton Effect

Trump said it was policies like Clinton’s that have caused the current economic doldrums in cities like Detroit. “Today, Detroit has a per capita income of under $15,000 dollars, about half of the national average. 40 percent of the city’s residents live in poverty, over two-and-half times the national average. The unemployment rate is more than twice the national average. Half of all Detroit residents do not work,” said Trump.

Almost 40 percent of the city’s population lives below the federal poverty line, the highest percentage of any of America’s bigger cities. Detroit’s median household income was slightly over $25,000 in 2011, about half of the national median income of $50,500.

Trump tied Clinton to the record of President Barack Obama, and under whom she served as secretary of state. “Their policies produced 1.2% growth, the weakest so-called recovery since the Great Depression, and a doubling of the national debt. There are now 94.3 million Americans outside the labor force. It was 80.5 million when President Obama took office, an increase of nearly 14 million people.”

“The Obama-Clinton agenda of tax, spend and regulate has created a silent nation of jobless Americans,” said Trump.

The candidate also said, “American households are earning more than $4,000 less today than they were sixteen years ago.” This claim is based upon an incomplete analysis of household income, according to an assessment by JustFactsDaily published in late July. A more complete analysis by the Congressional Budget Office found income went up by $5,000 from 2000 to 2013.

Trump Against Over-Regulation

In addition to simplifying the tax code and lowering rates, Trump promised to fight over-regulation as president. He promised to issue a “a temporary moratorium on new agency regulations” upon taking office. “This will give our American companies the certainty they need to reinvest in our community, get cash off of the sidelines, start hiring for new jobs, and expanding businesses.”

He also vowed to “cancel all illegal and overreaching executive orders” and ask all federal agencies to list “all of the regulations they impose on Americans which are not necessary, do not improve public safety, and which needlessly kill jobs. Those regulations will be eliminated.”

The speech wasn’t all music to the ears of free marketers. Trump also reiterated his opposition to NAFTA and other free-trade agreements that he said are responsible for a reduction in U.S. manufacturing and other jobs. Conversely, he said an “energy revolution” could come to America with better policies, and that he would lift restrictions that had been part of “the Obama-Clinton war on coal” he said had cost Michigan over 50,000 jobs.

The Clinton Reaction

Trump’s speech comes three days before Clinton is expected to give her own economic speech in Detroit. In a statement reacting to Trump’s speech, three of Clinton’s policy advisers said that “The core of Donald Trump’s economic plan involves reckless tax cuts that will add trillions to the debt to benefit the wealthy, Wall Street and big corporations.”

The Clinton campaign also launched an ad to counter Trump’s speech. In addition to touting the Tax Policy Center’s projections, the ad quoted Politico’s report that “Trump’s economic advisestrs are also his biggest donors.”

However, the ad then quoted an economic analysis from Moody’s that claimed Trump’s policies would reduce jobs, raise unemployment and possibly put the U.S. into a recession. Moody’s’ senior economist, Mark Zandi, was one of three authors of the Trump analysis — and he is a Clinton donor and supporter, something the ad did not disclose.

Moody’s had previously said Clinton’s policies would improve the economy.

The Clinton ad also took at least one of Trump’s statements about debt and the U.S. economy out of context. Trump previously told CNN, “I love debt” and “I’m the king of debt,” something the ad pointed out. However, in the same interview, Trump also said, “I love reducing debt, and I know how to do it better than anybody.”

 

Editor’s Note: Just Facts, the parent organization of Just Facts Daily, is a client of this author.  

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