Speaking at the Economic Club of New York, Trump outlined an economic blueprint he said would slash taxes and rejuvenate the economy, generating 4 percent annual GDP growth. To help achieve the planned cuts to spending, Mr. Trump plans to reduce the budgets of government agencies such as the Education Department, Transportation Department and Interior Department by 1% each year.
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The plan is also created to raise revenue by capping deductions at $100,000 for single filers and $200,000 for married filers, which the Trump campaign said would eliminate “many costly tax loopholes while stimulating growth”. It’s been a full year since the economy grew more than 2 percent in any given quarter, and it’s been almost two years since it grew north of 3.5 percent.
Of course, Trump also tied in the wall that he said he plans to build along the U.S. -Mexico border, adding that when compared to the trade deficit, the cost of building that wall – which he said will be paid for by Mexico – is “peanuts compared to what we’re talking about”. The effect of that promise, which would increase taxes for many investment managers, had been unclear before Trump scrapped the special rate for pass-through entities.
As CNN Money reported earlier that day, Trump’s economic, immigration and tax plans could cost the country $1 trillion over the first five years as well as 4 million jobs, according to British forecasting firm Oxford Economics.
But when pressed to explain and quantify the impressive results he predicted, Trump struggled to offer more details.
The heart of Trumps plan is a revised tax code, which includes a pledge that no business should pay more than 15 percent of its income in taxes, down from the current 35 percent corporate tax rate.
The last time the USA saw 4 percent growth?
“My plan will embrace the truth that people flourish under a minimum government burden and will tap into the incredible, unrealized potential of our workers and their dreams”, Trump said in a speech to the Economic Club of NY. Trump’s opponent, Hillary Clinton, has posted the past seven years of her taxes on her campaign website and her family’s taxes have been made public for the past 30 years, including the eight years her husband Bill Clinton was president.
He also proposes simplifying the USA tax code for individuals, reducing the current seven tax brackets to three: 12 percent, 25 percent and 33 percent of income after deductions.
Trump said the $4.4 trillion tax cut would actually cost less, about $2.6 trillion, under a mechanism known as dynamic scoring, which assumes that tax cuts will lead to faster growth, which in turn would allow at least some of the tax breaks to pay for themselves. The current rate for top earners is about 40 percent. Those programs make up two-thirds of the federal budget. “That would be the only discussion we’d have”, King, a Trump supporters, said on “New Day”. Corporations now pay a top statutory income tax rate of 35 percent. Trump has previously expressed support for the so-called “penny plan”, which calls for repeating such cuts over a number of years.
The rest of the money would come from almost $1 trillion in spending cuts over the next decade. Trump wants to cap tax deductions at $100,000 for single filers and $200,000 for married couples.
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Trump also plans on implementing a “modern regulatory framework”, saying in his speech that “people flourish under a minimal government burden”. Ron Wyden (D., Ore.) seeking a vote on legislation to require presidential nominees to release their tax returns.
