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.
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Trump also cited other key factors in his plan to grow the economy and reduce the debt: Renegotiating free trade agreements with Mexico, China and other nations he said are taking advantage of lax enforcement by the World Trade Organization.
Earlier this week, Oxford Economics predicted that the United States economy may actually shrink by a total of $1trn after one term of a Trump presidency, taking into account his proposed tax regulations and the promise to rip up trade deals with emerging nations.
Cutting government by one percent will not achieve much since it does not address entitlement spending, says Oren Cass, a former adviser to Mitt Romney, the previous Republican presidential candidate who lost to President Obama in 2012.
“The only people who get rich under Hillary Clinton’s scheme are the donors and the special interests.” he said.
“If we save just one penny of each federal dollar spent on non-defense, and non-entitlement programs, we can save nearly $1 trillion over the next decade – again this is spending that does not touch defense, and that does not touch entitlements”, Trump said. So far, her only proposals have included a 30 percent minimum tax rate on individuals making $1 million or more and an additional four percent surtax on income above $4 million.
Trump also introduced plans for an entirely new federal benefit this week, six weeks guaranteed paid maternity leave.
TRUMP, on 14 million people leaving the workforce during Obama’s presidency: “My economic plan rejects the cynicism that says our labor force will keep declining”.
Here is that math, according to Trump’s campaign: The candidate says that his policies, which include a simplified, three-bracket tax plan, a capping of corporate tax rates at 15 percent, and a new child-care plan (which as of now would only cover married parents ) will result in a $4.4 trillion reduction in revenues over 10 years.
Some economists also questioned the assumptions underpinning the plan he outlined on Thursday.
He called for an annual growth rate of 4%, a rate which hasn’t been seen since the Bill Clinton presidency in the 1990s.
“It doesn’t square”, Dr Cass said. “The penny plan is an idea that’s been out there for a while, but it does touch entitlement spending as well”.
Trump is counting on savings from the spending cuts to help offset the revenue loss from his tax cuts, in order to avoid increasing the deficit.
When Trump first unveiled his tax plan a year ago, it was criticized for being too expensive and too favorable toward the rich. Oxford Economics, a British forecasting firm, estimates his proposals would cut $1 trillion a year from the USA economy, a much bigger hit than occurred during the Great Recession of 2008 and 2009.
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Many other components of the plan appear unchanged from Trump’s most recent iteration of the proposal.
