Trump's Tax Plan: An Overview
As of Tuesday night, our new President-Elect is Donald J. Trump. Love him or hate him, the man will be our President come January 2017, and it is important that we understand what plans and policies he would like to implement.
One of the biggest focuses of Trump’s campaign was the economy. He made promises throughout his campaign that he was going to lower taxes, close loopholes, and make things function well for the hardworking families across America. He specifically hit on four key points. This list from his campaign website states them clearly:
- Reduce taxes across-the-board, especially for working and middle-income Americans who will receive a massive tax reduction.
- nsure the rich will pay their fair share, but no one will pay so much that it destroys jobs or undermines our ability to compete.
- liminate special interest loopholes, make our business tax rate more competitive to keep jobs in America, create new opportunities and revitalize our economy.
- Reduce the cost of childcare by allowing families to fully deduct the average cost of childcare from their taxes, including stay-at-home parents.
Throughout the next month, we will detail each of these points individually, explaining exactly how the President-Elect wants to achieve each of them and what their fiscal impact would be. However, we must begin by taking in some of the more notable statements from Mr. Trump on the economy and jobs in order to get an overview of his opinion.
In an address made to the New York Economic Club in September, Mr. Trump stated,
Look no further than the city of Flint, where I just visited. The jobs have stripped from this community, and its infrastructure has collapsed. In 1970, there were more than 80,000 people in Flint working for GM – today it is less than 8,000. Now Ford has announced it is moving all small car production to Mexico. It used to be cars were made in Flint and you couldn’t drink the water in Mexico. Now, the cars are made in Mexico and you can’t drink the water in Flint. We are going to turn this around.
Prior to this, Mr. Trump had addressed the Detroit Economic Club in August.
Under my plan, no American company will pay more than 15% of their business income in taxes. Small businesses will benefit the most from this plan. Hillary Clinton’s plan will require small business to pay as much as three times more in taxes than what I am proposing, and her onerous regulations will put them totally out of business. I am going to cut regulations massively.
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. To help unleash this new job creation, we will allow businesses to immediately expense new business investments.
No one will gain more from these proposals than low-and-middle income Americans...
We are also going to bring back trillions of dollars from American businesses that is now parked overseas. Our plan will bring that cash home, applying a 10 percent tax. This money will be re-invested in states like Michigan.
Finally, no family will have to pay the death tax. American workers have paid taxes their whole lives, and they should not be taxed again at death – it’s just plain wrong. We will repeal it.
Veering away from these speeches and into what has been said on a debate stage, Trump discussed business taxation during the first nominee debate on Monday, September 26th.
Under my plan, I'll be reducing taxes tremendously, from 35 percent to 15 percent for companies, small and big businesses. That's going to be a job creator like we haven't seen since Ronald Reagan. It's going to be a beautiful thing to watch. [Transcript from NPR]
During the final debate on October 19th in Las Vegas, Trump spoke up about NAFTA.
We are bringing our jobs back. I'm going to renegotiate NAFTA. And if I can’t make a great deal, then we’re going to terminate NAFTA and we're going to create new deals that are going to terminate it we're going to make a great trade deal And if we can't, we’re going to go separate ways because it has been a disaster. And cut taxes massively-we’re going to cut business taxes massively. They’ll start hiring people. We’re going to bring the two and a half trillion dollars that is offshore back into the country. We are going to start the engine rolling again because right now our country is dying at a one percent GDP.
There is more that could be sifted through, but the point is made clear. Donald Trump has made some bold economic claims. As we unpack the specifics of his tax and economic plans throughout the next few weeks, we will see what action these goals require so that we will be able to hold the President accountable if he does not follow through.