I have so far avoided taking any position on the two main candidates for president. For my colleague Mark Smith, don’t worry, I will. I intend to continue the path of avoidance in this blog. Today I would like to examine and evaluate each candidate’s economic program. I say nothing about their personal morality, or personality, or anything except economic program as articulated formally. Donald Trump and Hillary Clinton have both now laid out their plans. I will look first at Trump’s plan.
Donald Trump has articulated a plan that covers taxation, spending and economic growth. Taxation is of course a huge topic for many people, individuals and owners of businesses and corporations. Trump proposes to reduce corporate taxes from about 39% to around 15%, a figure actually lower than many other nations that had before had lower rates than the United States rate. Second, Trump himself said this about individual income taxes:
“My plan will reduce the current number of brackets from 7 to 3, and dramatically streamline the process. We will work with House Republicans on this plan, using the same brackets they have proposed: 12, 25 and 33 percent. For many American workers, their tax rate will be zero.” (Speech to the Detroit Economic Club, transcript August 8, 2016).
So Trump will collapse the number of tax brackets and reduce tax rates within each bracket.
Third, Trump proposes to eliminate the Federal “death tax.
Fourth, on regulation, Trump said:
“Upon taking office, I will issue a temporary moratorium on new agency regulations. My running mate, Mike Pence, signed a similar order when he became governor of Indiana. This will give our American companies the certainty they need to reinvest in our community, get cash off of the sidelines, start hiring for new jobs, and expanding businesses. I will also immediately cancel all illegal and overreaching executive orders.” (Ibid.)
While this is a temporary measure, it has potential for a permanent disposition on the part of Trump and his potential administration.” And Trump takes particular aim at the EPA and its regulations.
Fifth, Trump gave indication that he will re-examine all trade agreements. The ostensible reason for this action is to protect and promote new jobs. For conservatives, this part of the plan will be questionable. Does Trump intend to be a protectionist or simply to re-define those agreements that do not actually promote real free trade.
Trump does not propose free college education. But he does propose that child care expenses be fully deductible. He also proposes a pretty large infrastructure expenditure, which he said would be larger than that proposed by Clinton. He was vague on the particulars of this part of the plan.
Now to Hillary Clinton’s plan. Clinton herself has said that she would favor a minimum tax on the “wealthy” (undefined, but some reports take the limit down as far as $125, 000, meaning that everyone above that income would pay the tax). There would be no cut in tax brackets for the top earners, for corporations, for businesses in general, or for any other bracket. Clinton did say she favored “simplifying” taxes for small businesses by making filings easier—but no tax rate cuts.
Clinton also came out against the TPP trade agreement, apparently to undermine Trump’s opposition. She said nothing about other agreements.
She also favors very large—but undefined—“infrastructure” expenditures, the same as Trump, but from what she said about the content of the spending, Clinton’s spending package would be much larger in keeping with her (and liberals) basic Keynesian orientation. She said the United States should borrow to fund this “investment,” classic Keynesian policy but not actually Keynes himself.
Controversially, Clinton wants to provide “subsidized higher education” (a less vigorous Sanders proposal). What she said was “debt free college.” That looks a lot like free college.
Finally, she proposes even more “financial regulation.” And just to top it off, she vigorously supports nearly all union ideas that have to do with say a minimum wage (of $15.hour, touted by the SEIU—Service Employees International Union).
I might have missed a few minor (or major) proposals from either side. But the reader can see the difference. I will let you decide which would actually make an economy grow on balance, recognizing that even Trump’s ideas if implemented have some problems.
I would like to say more on economic growth in a later blog. For now, let the feedback begin.