Monday, August 8, 2016

Understanding Donald Trump's New Economic Plan

Donald Trump delivered  an economic speech today at the Detroit Economic Club. It was billed as "major."

In fact, it was more of the same, with a few wrinkles that included a move away from his earlier pledge that the highest tax bracket would be 25% in a Trump administration. He now says it would be 33%.

He called for tax simplification:
Tax simplification will be a major feature of the plan.
I have already pointed out this is a scam. We don't need a new a simplified tax plan. We need lower taxes from the current tax structure. Anyone advocating a simplified tax plan is hustling the public. When someone says simplified taxes, you should think: fewer tax deductions.

As Murray Rothbard put it:
The flat tax has been cleverly labeled a tax “reform,” the very word
“reform” being heavy with the implication that no man or woman of good
will, be they liberal or conservative, Democrat or Republican, can possibly
stand opposed to such a plan. My favorite writer, H. L. Mencken, once wrote
that he had learned at his father’s knee in Baltimore what “reform” in
politics really meant: “mainly a conspiracy of prehensile charlatans to mulct
the taxpayer.”...
If the flat tax is neither evidently fair not genuinely simple nor neutral to
the market, if it is merely a snare and a delusion for more confiscatory
taxation, it is easy to understand why politicians and bureaucrats may love
the idea.
 Trump did propose an increase in one deduction, though. A childcare deduction:
My plan will also help reduce the cost of childcare by allowing parents to fully deduct the average cost of childcare spending from their taxes...As part of this new future, we will also be rolling out proposals to increase choice and reduce cost in childcare, offering much-needed relief to American families. I will unveil my plan on this in the coming weeks that I have been working on with my daughter Ivanka and an incredible team of experts.
This, of course, is because Trump is trailing Hillary badly when it comes to women voters.

Why not try to buy them off with tax deductions? Which will, of course, result in the elimination of still other deductions to make up for the lost revenue from this deduction.

Moving away from his scam tax plan, there was one plus, Trump did say:
Upon taking office, I will issue a temporary moratorium on new agency regulations.
I doubt much will come out of this either.

When it comes to economic policy, Trump is pretty much a mainstream hocus pocus political operator.



Here's Trump announcing his tax "simplification" proposal and a hint that it will include eliminating loopholes, a.k.a deductions.


NYT nails it:

The economic plan Trump described includes traditional GOP policies that don't benefit working-class Americans much


  1. I run an LLc. My federal tax is 39.6% and my state tax is about 9%. Only a part of the state tax is deductible because of the Pease. Trump explicitly promised that no business would have a greater than 15% federal tax rate. Seems like a cut to me and falling on people who do a lot to innovate, grow, employ, etc in the USA.

    1. Lower taxes are desperately needed. But how can you have any confidence that he, or any candidate, will follow through? Promises of tax relief are an infamous political mirage.

    2. The 15% rate is the Chapter C rate. It does not apply to a LLC.

  2. Re: your update. Quoting a NY Times criticism of Trump is silly. I hate an ad hominem butr you know as well as I the times is propaganda and lies particularly about any political outsider threatening the establishment.

  3. Cutting taxes is easy. Cutting spending is hard.

  4. Wenzel thinks he knows more than he does. Dunning Krugers are dime a dozen among low IQ libertardians.