Trump shifted between an aspirational tone – he said his plan will lead to the creation of 25 million new jobs over 10 years – and cynicism about the current state of U.S. economic policy as he addressed the Economic Club of NY.
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He projected 25m new jobs would be created broadly within the timeframe of a two-term Trump presidency, as a result of an average annual growth rate that would rise from current projections of about 2% to 3.5% through his tax-cutting and trade policies.
A version of his tax plan released Thursday, in conjunction with a speech Trump delivered to the Economic Club of NY, made no mention of the proposed pass-through rate. “My great economists don’t want me to say this, but I think we can do better than that”, he said, suggesting 4 percent growth was possible.
Broadly, Trump, said his economic plan “rejects the cynicism that our labor force will keep declining, that our jobs will keep leaving and that our economy will never grow as it did before”.
The speech and updated proposal rehash much of what Trump has already run on, but repeated updates to his tax proposal and economic projections make it hard for economists to keep an up-to-date tally on exactly what a Trump White House would mean for the domestic economy.
If he makes that change, it would mean that some small businesses, whose owners take home as little as $225,000 for a married couple, would face marginal tax rates almost double what corporations would pay.
During Clinton’s eight years as president, the economy grew an average of almost 4% a year.
In a speech in August, Trump indicated he would align his proposed individual income tax rates with that of the House Republicans’ tax reform plan.
To help offset the cost of the tax cuts, he said Thursday that his administration would reduce nondefense, nonsafety net spending by 1 percent of each previous year’s total.
On taxes, Trump proposed to simplify the tax code into three brackets down from seven, and to take poor earners out of tax altogether with individuals with an income under $25,000 (£19,000) and married couples under $50,000 paying no tax.
If growth remains around a more realistic 2 percent, Goldwein said, Trump’s plan would add roughly $5 trillion to the nation’s debt.
He vowed to not cut defense spending and to exempt Social Security, Medicare, and Medicaid from any reductions. He also reiterated his plans to unleash fossil fuels and cut back on government regulation, both of which he says will further spur economic activity.
The U.S. had experienced sluggish economic growth in the first half of 2016, but the last few monthly jobs reports have shown a steady increase in the creation of new jobs.
The programs Trump places off limits for cuts make up almost 70 percent of the federal budget, and it wasn’t immediately clear how he would reach his spending-cut goal with such programs off the table.
“This is more than just tinkering”, said Maya Macguineas, president of the Committee for a Responsible Federal Budget. “Just look at the math, it works”.
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