Tuesday, August 9 2016 22:20 EEST
Robert Reich: Trump's economic plan today is slightly different from the plan he's put forth before'
USA, presidential election, Donald Trump, Robert Reich, trans Pacific partnership, economic, tax systems, incomes, private firms, infrastructure

Let me grade the key features of Trump's economic plan that he unveiled today at the Detroit Economic Club - which is slightly different from the plan he's put forth before.

Robert Bernard Reich shared on his page on Facebook

'Let me grade the key features of Trump's economic plan that he unveiled today at the Detroit Economic Club -- which is slightly different from the plan he's put forth before.

1. He wants to streamline the tax system into three brackets of 12 percent, 25 percent and 33 percent (a change from his former tax plan, which had a zero rate for the lowest income earners, and a top tax rate of 25 percent). This would raise taxes on the lowest income Americans who now pay 10 percent, and the middle, who now pay 20 percent. The plan is similar to that of House Speaker Paul Ryan, whose plan would give an average annual tax break of nearly $800,000 to the top 0.1 percent and jack up the national debt by $4 trillion, according to Citizens for Tax Justice.

I’d give this a failing grade – a solid F.

2. Trump calls for the elimination of special tax treatment for carried-interest income at private-equity firms and other investment firms. But this is a trick (a trump d'eoil, if you will), because he also wants to cut business taxes to 15 percent (from the current 35 percent), which will slice the taxes paid by the members of hedge-fund and private-equity partnerships.

This merits an F as well.

3. He’d allow companies to immediately expense new investments, a policy that conservatives have pushed in recent years. Today, businesses are required to expense investments over the course of years, based on a complicated system of estimated depreciation for assets. That will also cost the Treasury trillions.

This proposal merits a D, because it might be a good idea if Trump finds a way to pay for it without cutting Medicare, Social Security, or vital safety nets.

4. Like George W. Bush, Trump proposes to eliminate the estate tax. For 2016, the estate exemption is $5.45 million per individual. This means a rich person who dies this year can leave his heirs up to $5.45 million and pay no federal estate taxes. Only about 10,800 individuals who died last year left estates large enough to require filing an estate tax return, according to estimates by the Tax Policy Center. After allowing for deductions and credits, that number drops to less than 5,400. The federal government collects about $25 billion annually from the estate tax, but we’re just on the cusp of a wave of wealthy baby boomers whose heirs will reap far more.

Another F.

5. He wants to make child-care costs fully tax-deductible. This would helps the rich more than the poor because most of the deduction would benefit people who can afford to pay for expensive child care.

An F.

6. He’ll put a 'moratorium' on new regulation, presumably including all financial rules still to be promulgated under Dodd-Frank. Absurd.

Another F grade.

7. He wants to 'renegotiate' the North American Free Trade Act, and walk away from the Trans Pacific Partnership. NAFTA doesn’t need renegotiation because most of the jobs that went to Mexico have now gone to Asia. But the Trans Pacific Partnership is an abomination.

I'll give him an A minus on this one.

8. He also referred to his plan to invest a substantial amount in new infrastructure, and borrow the funds necessary to pay for it. Good idea.

This merits an A plus.

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