Trump Unveils Revised Economic Plan

NOTE: This column is copyrighted material; therefore reproduction or retransmission is prohibited under U.S. copyright laws.

Republican presidential nominee Donald Trump offered revisions to his tax proposal Monday that brought it closer to a proposed House Republican plan, as he promised “the biggest tax revolution since the Reagan tax reform.” The revisions came as part of an economic plan he rolled out in Detroit, and included a pledge to cut regulations “massively.”

The plan. Instead of the three individual tax brackets of 10, 20 and 25 percent he had earlier proposed, Trump adopted a House GOP proposal with rates at 12, 25 and 33 percent. The plan would consolidate the current seven tax brackets, which range from 10 percent to 39.6 percent. Certain low-income people would be exempt from taxation, as they are in current law. Trump said in his speech explaining the tax rates that besides the three rates, “for many American workers, their tax rate will be zero.”

The Committee for a Responsible Federal Budget (CRFB), which has been highly critical of Trump’s economic policies, said it was encouraged by the revisions. The CRFB said the change in the tax brackets means the plan is “likely to cost significantly less” than his previous proposal. “It’s encouraging that Donald Trump appears to be modifying his tax plan, which would push America toward an unprecedented level of debt unless it is significantly changed,” said Maya MacGuineas, president of the CRFB.

The Hillary Clinton campaign blasted the new plan. “Donald Trump’s plan is just a repackaging of trickle-down economics—and it doesn’t help our economy or the vast majority of Americans,” the Democratic nominee said in a tweet, a theme she repeated in a speech Monday. Clinton’s plan would increase taxes on the wealthiest Americans.

Cut in business tax rate. The other proposals Trump floated include cutting the business tax rate to no more than 15 percent of business income for both corporations and businesses that pay through the individual tax code, down from the current 35 percent corporate rate; a repeal of the estate or “death” tax; allowing families to fully deduct the “average cost” of child care from their taxes; and bringing back profits held overseas by U.S. corporations through a 10 percent tax. “Our lower business tax will also end job-killing corporate inversions, and cause trillions in new dollars and wealth to come pouring into our country — and into cities like Detroit,” Trump said. “To help unleash this new job creation, we will allow businesses to immediately expense new business investments.”

Trump said changes he will push for in the tax code will make it so that “no American company will pay more than 15 percent of their business income in taxes.” However, a 15 percent corporate tax rate might not be so welcome by some companies if it were to include the elimination of tax breaks. A May 2013 Government Accountability Office report found that the effective tax rate for profitable U.S. corporations in 2010, the latest year available at the time, was 12.6 percent. Larger corporations, in particular, paid lower taxes.

Trump again floated a 10 percent tax on corporate profits held overseas, though his new plans contained less detail than the old ones laid out in September.

Meanwhile, Trump also pushed regulatory reform. The Republican presidential candidate’s big economic speech Monday included a series of pledges to halt pending regulations, get federal departments to provide a list of unnecessary rules to rescind and a cancellation of “illegal and overreaching executive orders.”

Besides regulations, Trump pledged to lift “restrictions on all forms of energy.” Among the regulatory items Trump would repeal are EPA’s Clean Power Plan, its Waters of the US rule and the moratorium on federal coal leasing, his campaign said. Trump would “make land in the Outer Continental Shelf available to produce oil and natural gas” and “cancel the Paris Climate Agreement.”

NOTE: This column is copyrighted material; therefore reproduction or retransmission is prohibited under U.S. copyright laws.