If we’re being honest, it’s like any other Republican economic plan, only Trumpier.
Yesterday, Donald Trump tried to right his political ship by introducing his economic plan in a speech to Detroit investors.
While Trump did position his economic plan as a major game changer in the presidential race, in actuality, it isn’t anything that we haven’t heard before. Let’s break it down in our 10-Point Exert!
[UPDATE 05/01/17: Since this was written, now President Donald Trump, has created a revised form of this tax plan. While the major beats are the same, there are a few differences worth noting. You can read about them here.]
Point 1: Before we get into the basics of Trump’s economic plan that he unveiled yesterday, it’s important to realize that fundamentally, Trump’s economic plan is very much rooted in conservative fiscal ideology; ie cutting taxes and reducing regulations. However, the one major issue that Trump’s economic plan diverts from other traditional Republican plans is in free-trade (but more on that in a bit).
Point 2: We’ve talked about Trump’s tax plan before. In short, it’s the “Oprah giving away cars” of tax cuts; basically everyone is getting their taxes cut. Trump’s new economic plan basically incorporates this central philosophy, with one exception; he changed the percentages in the three tax brackets.
Point 3: Trump’s new tax plan incorporates some of the basics that House Republicans had introduced in the summer session by narrowing down the current 7 income-tax bracket system into 3 tax brackets; 12%, 25%, and 33%. Originally Trump’s three tax brackets were 10%, 20%, and 25%, but there was justified criticism that his original plan would add trillions to the national debt. Everything else from his original tax plan is basically the same however.
Point 4: One of the more unique ideas that Trump has been harking on revolves around the “child care tax break.” It essentially is a tax break that would theoretically be used towards child care expenses. While traditionally not a very Republican tax break, it’s a specific point in Trump’s tax plan that he hopes will appeal to his non-traditional GOP base.
Point 5: To be clear though, we don’t know how far any of his supposed tax cuts would go. For example, would his child care tax break also extend to lower income families that are exempt from paying income taxes? Because as it stands, that specific tax break would end up helping wealthier families more by having their child-care costs be fully deductible.
Point 6: Another big pillar in Trump’s economic plan has to do with reducing regulations. Specifically putting a moratorium on any new regulations to the government registrar until the economy “gets back on its feet.” He alluded to that current regulations reduce employment opportunities, so by his logic, rolling some of them back would reduce the unemployment rate.
Point 7: The Trump campaign has specifically pointed out various environmental regulations that it would like to rollback. Most notably are ones by the Environmental Protection Agency (EPA) that deal with carbon-dioxide emissions and protection of wetlands. However, it’s unclear if Trump’s plan would also rollback on regulations dealing with the financial industry.
Point 8: But the most interesting aspect of Trump’s economic plan comes in the form of his free-trade policy. Or better yet, the lack of one! During Monday’s speech, Trump called for withdrawal of trade pacts, threatened tariffs on China for “currency manipulation”, and to start aggressively enforcing intellectual-property protection. In general, Trump positions himself as a candidate that is an opponent of current free-trade policies, even going as far to threaten walking away from long-time trade treaties like North American Free Trade Agreement (NAFTA) if “the terms” weren’t to his liking!
Point 9: Trump’s free-trade policy is interesting because it goes against what the GOP has considered fundamental to their economic identity for the last few decades. In the past, Republican presidential candidates were always ardent supporters of free-trade, consistently pushing for more open trade deals and wanting to establish stronger relations through trade agreements like NAFTA. Trump on the other hand, has been a strong opponent of free-trade, which has become a major talking point in his campaign and gets a big reaction from his base.
Point 10: With the exception of free-trade, Trump’s economic plan is very similar to past economic plans put out by past Republican presidential candidates. In fact, the basic talking points aren’t that much different from Mitt Romney’s economic plan when he was running president back in 2012. It’s also important to note that one of the biggest benefactors of Trump’s economic plan would be those in the highest tax bracket. Considering many of the tax breaks would benefit everyone – including those in the highest tax bracket – and the highest tax bracket having a lower tax rate (current highest tax rate pays 39.6%), the wealthiest in the US become the biggest winners under Trump’s economic plan. So other words, it’s a Republican economic plan.
(Photo Credit: PBS News Hour’s YouTube Channel, Pixabay.com)