Presidential candidate Donald Trump unveiled his tax plan yesterday, and unlike his plan for immigration or anything else, it actually had quite a bit of detail. Unfortunately that detail was a combination of populous pandering and commandeered shop-worn ideas of recent conservative thought on the subject of taxes. So I am in the position that I disagree with the former of Mr. Trump's plan, and agree with the latter. In other words, it may surprise some of my regular readers, I find myself at least in partial agreement with Donald Trump.
I will engage in analysis on the dichotomy of my opinion on the Trump tax plan by first expanding on the parts of his plan with which I agree, and then follow it immediately with a counter part of his plan with which I disagree.
The lowering of the corporate tax rate from 35% to 15% is an idea that every Republican presidential candidate supports, and would indeed incentivize American business to remain in America and create American jobs. However, Mr. Trump's insistence on "punishing" business by taxing (read: tariffs) over-seas profits would mitigate the positive benefit of lowering the tax rate, and may quite possibly cause an economic downturn as the Smooth/Hawley legislation did that was signed by President Hoover in 1930.
The Trump tax plan calls for the reduction of tax brackets from the current 7 or 8 to just 4. This simplification of the tax code is again something that every Republican presidential candidate supports. However, the manner in which Mr. Trump revises the current tax system puts more of the tax burden on fewer tax payers in order to garner him populous appeal with the middle-class. Mr. Trump has suggested just the opposite of what will make this country economically strong, i.e. narrowing the tax base instead of widening it.
Under the Trump plan the top earners would pay a lower rate, but would pay a larger percentage of the total tax burden. Currently, about 38% of people pay no federal income tax at all, under the Trump plan that would increase to around 50%. This means that those who are paying taxes will necessarily shoulder more of the burden. And many of those are business owners who will be less likely to hire workers. Not to mention that every study that has been done on tax cuts clearly shows that cuts in the middle and the bottom have very little stimulating effect on the economy. Cuts at the top end, according to the studies, provide the biggest shot-in-the-arm to economic growth.
Mr. Trump does call for the repeal of the inheritance tax (death tax), but again, all conservatives, and most certainly all the Republican presidential candidates, are in favor of this. The Trump tax plan is designed more to garner support for the candidacy of Donald Trump than it is to implement a pro-growth, fair tax system that this country desperately needs. His plan perpetuates and augments the current system which has the top 5% of wage earners paying 70% of the federal taxes in this country. This is not only a dis-incentive to growth, but it is inherently unfair and not conservative. But then coming from a man who was a Democrat up until 10 minutes ago, I am not surprised.
The big issue that you trivialize is the TARIFF on imports. This is huge as it will Help level the playing field. The combo of tax cuts for corps and then the tariff should give a boost to MADE IN AMERICA. Also this is a return to the way the USA operated before about 1917 when the TARIFF paid the Fed Gov cost. Trump also said he was going to massively cut the Dept of Ed and a few other massively bloated Fed Depts. In a way Trump is creating a unique situation like a Section 8 for FACTORIES rather than housing. Give a man a Fish or give a man a fishing pole. Lastly even with Trumps inspiring ideas I believe our once great country that used to be under GOD but now under an apple tree is finished but I would like to go down fighting but with a FIGHTER as a leader like TRUMP. In a hurry and have to go.
ReplyDeleteTariffs as he is talking about will inevitably lead to less economic prosperity not more. Just as it did in the 1930s. A great depression could be the legacy of a Trump presidency if he gets his way on tariffs.
ReplyDelete1790 to 1920 the fed budget was covered by import TARIFF. We were the financial powerhouse of the world in that period. And the envy of the world. Due you get it........we had no fed drag on the economy. Also we had no income tax until 1917 . The Federal Reserve was created in 1914 haha it is not Federal and not a reserve. This country needs JOBS and MANUFACTURING and tariffs will help bring both. Adidas sneakers used to be made in USA and sold for 150 they up and went to China about 20 years ago. Imported them in and sold them for 150 haha Trump is correct this country is just stupid. Adidas is just ONE of many many corps that said whoopee I like Chinese food too. Nafta, Gatt and Cafta all traitorous trade agreements that cost this country millions upon millions of high paying jobs. Just take a good long look at Detroit which used to be a manufacturing icon city that was the envy of the world. We are in a depression now that is only being propped up by 0 interest rates and Tarp, QE 1,2,3,4 haha what a joke. Save some money put it in the bank soon you will be charged by the BANK haha cmon have a laugh cause the American people walk around saying were in a recovery while 47 million get food stamps lol and millions are sleeping in the streets. The unemployment numbers are fake when a man comes off unemployment his name just goes off the rolls haha you get it. What is coming will make the 30s depression look like a warm-up....... and it is right in front of us!
ReplyDeleteTariffs and imposts were the only sources of revenue previous to the 20th century. But we had an agrarian economy. You can not seriously think that their effect would be the same on the type of economy we have today. From the 1920s on anytime we have imposed tarffs it has hurt the economy and killed jobs, that is a fact. Trump's plan not only is wrong because of tariffs but he shrinks the tax base by excusing more people from paying federal tax. This also is never a good thing and slows economic growth.
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