Thread: Bartiromo: An early look at Trump's economic plan

Bartiromo: An early look at Trump's economic plan

Donald Trump Is hoping next week acts as a catalyst to turn around what has been a tough week for the Republican presidential nominee. Trump is expected to unveil his economic plan on Monday, which he says will create millions of new jobs. I caught up with one of his economic advisers -- Stephen Moore, Distinguished Visiting Fellow, Institute for Economic Freedom and Opportunity, The Heritage Foundation, to find out what is in the works. Our interview follows, edited for clarity and length.

Q: What will Trump propose?


A. The heart of the plan is a 15% corporate tax rate. That's down from the current rate of 35%. We will, almost overnight go from being one of the highest corporate tax countries in the world to one of the lowest. In fact, there may be one or two other countries with a lower corporate tax rate. But we'd be nearly the lowest tax rate on businesses in the world, and that would bring a lot of jobs and businesses back to the United States. If we have a 15% corporate tax, companies won't use inversions and leave the United States. They will come to United States. And then there will be a middle class tax cut. Every time we've met with him, Trump has said, "I want it oriented toward the individual, helping middle class, and financially stressed out families." we're running the numbers now, and the average middle class family will save somewhere in the neighborhood of $1,500-$2,000 a year on their federal income taxes. It eliminates the estate tax. It eliminates the marriage penalty. It eliminates the alternative minimum tax. About 90% of Americans would no longer have to itemize deductions because they would be able to take a standard deduction.You wouldn't have to keep track of all your receipts on purchases, on charitable deductions, because most people would just take the generous standard deduction.

Q: So the question keeps coming up, how do you pay for it? How do you cut taxes and not drive up the deficit.

A. First of all, It's surprising how little the corporate tax raises. It's not a huge revenue generator for the U.S. government because a lot of companies don't pay anything because of all the loopholes in the system.We have these high rates. It's very counterproductive in terms of where companies locate.That's the very essence of a bad tax system. One that's complicated and, with high rates, doesn't raise much money. We will close loopholes on the corporate side. So stuff like investing and green-energy deductions will go away. The plan will find a way to shift the way the corporate tax is implemented so that it would apply more to imports. When countries like China, India or Mexico send products into the United States, we wanna tax those then, when American companies export our goods and services, we wanna reduce the tax on them. What we do now is we tax what we export, but we don't tax what's imported. This is called the Border Adjustable Tax, and so this will shift that. When China sends $500 billion worth of goods and service to the United States there will be a tax applied. This is not a violation of trade agreements. In fact, this is the way most other countries tax their business side, so we're gonna skip to a border adjustable tax system that will help our exports, and reduce the trade deficit.

Q: What about the regulation side of it?

I'm a member of this group called the Trump Leadership Council. It's a group that includes CEOs from Fortune 100 companies who run energy, transportation and/or financial services companies. We've been listening to these people talk about what their constraints are, in terms of growing their companies. So many of these CEOs say the problem is not even the tax burden. The biggest problem is this regulatory stranglehold. And so we're looking at what kinds of executive orders and regulations could be almost immediately repealed by Trump. On the first day in office, a lot of the executive orders that Obama signed, a new president can come in and rescind those.Reagan did this when he entered office. The first act he put in place was he deregulated the price of oil and gas with a stroke of the pen, in his first hour of the White House. Those are the kinds of things that Trump is saying he wants to do.

Q: Some people estimate the Trump tax plan alone will cost $10 trillion. What about the debt and deficits? Won't all of this break the bank?
A. On the business side, most of the payoff is through closing loopholes. We do think it'll generate more economic growth. It's trickier on the individual side, because the vast majority of revenues that the government raises is not through the business tax, but through the individual income tax system. So we're talking about some kind of a cap on deductions that people can take, especially wealthy people. This is not well known but there are dozens of loopholes and carve-outs in the tax system. Most of the benefits of those go to the highest-income people. Anyone who makes over $1 million will have most of their deductions phased out. They're gonna pay a lower tax rate, but they're gonna lose a lot of deductions. Hillary Clinton is running around the country saying it's a $10 trillion revenue loss, but that's not true. We've probably reduced the revenue loss to about one-third of that. We are also considering a sort of repatriation tax where companies are charged a small tax to bring the $2 trillion overseas back home. American companies like Microsoft, Apple, so many others have cash abroad. They'll be able to bring that money back for a tax of somewhere between 5-10%. that'll bring a lot of that capital back to the United States and we'll actually raise revenue. And there's been some talk about using that money from the repatriation tax to pay for infrastructure spending.

Q: Let me go back to trade. If we renew all of these trade deals that he's talking about, is that going to be more of a disruption and bring higher-priced goods here as opposed to a better trade deal for America?


A. I am a free trader. And I've said I don't agree with Donald Trump on some of the positions he takes on trade.He wants to renegotiate (the Trans-Pacific Partnership) and he wants to renegotiate NAFTA. TPP isn't really even in existence yet, So that wouldn't be so disruptive. I think the idea is to start over. If you have a new president, you start over the negotiations. On NAFTA, we will see. I'm not so sure because I think NAFTA's been a positive thing for the economy of North America.

Q: So do you think he's gonna soften up some of these ideas, should he become president?

I don't know. I think he's gonna keep some of these promises. he's said he's gonna do it. And it's popular with a lot of voters. there is a perception that NAFTA has cost us a lot of manufacturing jobs. I think most of the manufacturing job losses have been due to automation and technology. But what is true is it has impacted people disproportionately. It's been a net plus for the economy. But it's also true that some manufacturing towns have been displaced by NAFTA.

Q: Donald Trump has had a hard time keeping on message. Do you think he can win this in the next 100 days?

A. I can't tell you how frustrated all of us are with the fact that the focus isn't completely on the economy. Because, just a week ago, we got these abysmal numbers on the economy. And then, a week or two before that, we got abysmal numbers on the job front. He should be holding up the front page of the newspaper from just last Saturday. It said the "Worst recovery since the Great Depression ... "

Q: It was the Weakest recovery in 49 years.

A. If he can focus almost exclusively on the economy for the next three months, the answer to your question is yes, he can win this race. If you look over the 50, 60, 70 years, presidents and parties in power don't get re-elected when you have 1% economic growth.

It's, by far, Hillary's greatest vulnerability. She has nothing new at all. In fact, if you listen to what Hillary's saying for the last three weeks, it's one message. "I'm not Donald Trump." That's her whole campaign message. the way that Trump has to counteract that is to say, "Hillary, you own this foreign policy and you own this economy and you are the agent of the status quo. And I'm the agent for change."

http://www.usatoday.com/story/money/...plan/88285342/

Do you think he can win this in the next 100 days?

If he can focus almost exclusively on the economy for the next three months, the answer to your question is yes, he can win this race. If you look over the 50, 60, 70 years, presidents and parties in power don't get re-elected when you have 1% economic growth.

It's, by far, Hillary's greatest vulnerability. She has nothing new at all. In fact, if you listen to what Hillary's saying for the last three weeks, it's one message. "I'm not Donald Trump." That's her whole campaign message. the way that Trump has to counteract that is to say, "Hillary, you own this foreign policy and you own this economy and you are the agent of the status quo. And I'm the agent for change."

If Trump can stick to the economy and national security, abandon any types of tangential outbursts and stay focused on his strengths and Hillary's weaknesses, this election is his to win.