Released Thursday by the Donald Trump campaign –The Trump Economy: 25 Million New Jobs Created In The Next Decade
Donald Trump has proposed sweeping reforms in tax, trade, energy and regulatory policies. Trump economists estimate that the plan would conservatively boost growth to 3.5 percent per year on average, well above the 2 percent currently projected by government forecasters. Growth averaged at least three and a half percent per year in the 55 years between World War II and the year 2000. With faster growth, the economy will create as many as 25 million new jobs over the next decade. For each 1 percent in added GDP growth, the economy adds 1.2 million jobs. Increasing growth by 1.5 percent would result in 18 million jobs (1.5 times 1.2 million times 10 years.)
A Pro-Growth Tax Plan
Every income group receives a tax cut under the Trump plan. Millions of low-income taxpayers will be removed from the tax rolls.
The greatest percentage reduction in tax bill goes to lower income taxpayers, as shown by these examples:
A married couple earning $50,000 per year with two children and $8,000 in child care expenses will save 35% from their current tax bill.
A married couple earnings $75,000 per year with two children and $10,000 in child care expenses will receive a 30% reduction in their tax bill.
Married couple earnings $5 million per year with two children and $12,000 in child care expenses will get only a 3% reduction in their tax bill.
The plan lowers the corporate tax rate to 15%. The current 35% rate is one of the highest in the world, making domestic investment unattractive. It includes a 10% tax on repatriation, and many larger businesses will want to repatriate trillions of dollars that they now keep abroad to avoid taxes.
The plan also allows U.S.-based manufacturers to elect full expensing of plant and equipment, an invitation to massive investment. If they elect this approach, they will give up the ability to deduct interest expense.
Tax brackets in the individual income tax will be reduced from 7 to 3. Tax rates will be 12%, 25% or 33%, with thresholds very similar to the House GOP plan.
The new brackets will also provide a lower income tax rate for high-income individuals and small businesses. The plan will cap deductions at $100,000 for single filers and $200,000 for married filers, eliminating many costly tax loopholes while stimulating growth.
The standard deduction will be $30,000 dollars for married couples and $15,000 dollars for single individuals. Most taxpayers will have no need to itemize, simplifying their tax returns and making it easier to file.
The plan provides a child care deduction for children up to 13 years of age for average child care expense. There’s an income cap, so the new deductions don’t apply to the rich.
Finally, the plan eliminates the carried interest loophole for Wall Street and the death tax, which falls especially hard on small businesses and farmers.
A Modern Regulatory Framework
In 2015 alone, federal agencies issued over 3,300 final rules and regulations, up from 2,400 the prior year. Studies show that small manufacturers face more than three times the burden of the average US business, and the hidden tax from ineffective regulations amounts to “nearly $15,000 per US household” annually. Excessive regulation is costing our country as much as $2 trillion dollars per year, and we will end it.
The Trump plan calls for an immediate halt to new federal regulations and a very thorough agency-level review of previous regulations to see which need to be scrapped. Agencies will be required to list all their regulations and rank them in terms of their contribution to growth, health and safety, with the goal of strengthening the useful ones and reducing the harmful ones.
Specific regulations to be eliminated include:
The EPA’s Clean Power Plan, which will impose $7.2 billion in annual costs, according to the agency itself — and far more according to private sector critics. The rule if implemented will essentially shut down most, if not all, electric power plants fueled by coal.
The EPA’s rule on the “Waters of the United States” (WOTUS) covers virtually all waters in the nation whether navigable or not and, by extension, much of the land use, from ponds on farms to storm run-off from home building sites.
The EPA’s stricter standard for ground-level ozone would add $1.4 billion to annual emissions compliance costs (excluding $800 million for California alone). The new ozone standard will push hundreds of communities out of compliance, and force states to devise plans to limit industrial activity and transportation projects, as well as replace existing emissions control equipment with more advanced (and costly) emissions equipment.
The FDA Food Police, which dictate how the federal government expects farmers to produce fruits and vegetables and even dictates the nutritional content of dog food. The rules govern the soil farmers use, farm and food production hygiene, food packaging, food temperatures, and even what animals may roam which fields and when. It also greatly increased inspections of food “facilities,” and levies new taxes to pay for this inspection overkill.
The EPA’s Renewable Identification Number (RIN) program penalizes refineries if they do not meet certain blending requirements. These requirements have turned out to be impossible to meet and are bankrupting many of the small and midsize refineries in this country. These regulations will give Big Oil an oligopoly by destroying the small to mid-size refineries.
An America-First Trade Policy
Trade will be an important driver of economic growth along with other key structural reforms. Donald Trump will ensure that every single one of our trade agreements increases our GDP growth rate, reduces our trade deficit, and strengthens our manufacturing base.
There will be no Trans-Pacific Partnership, even if the President and Congress are reckless enough to pass it in a lame duck session against the will of the American people.
Donald Trump will appoint the toughest and smartest trade negotiators to fight on behalf of American workers and direct the Secretary of Commerce to identify every violation of trade agreements a foreign country is currently using to harm our workers.
NAFTA will be renegotiated to get a better deal for American workers. If our partners do not agree to a renegotiation, America will withdraw from the deal.
China will be labeled a currency manipulator. Any country that devalues their currency in order to take unfair advantage of the United States will be met with sharply, and that includes tariffs and taxes.
The U.S. Trade Representative will bring trade cases against China. China’s unfair subsidy behavior is prohibited by the terms of its entrance to the WTO. If China does not stop its illegal activities, including its theft of American trade secrets, Donald Trump will use every lawful presidential power to remedy trade disputes, including the application of tariffs.
Unleash American Energy
The Trump energy policy that will make us energy independent, create millions of new jobs, and protect clean air and clean water. We have one of the world’s most diverse resource bases – from abundant coal, oil, and natural gas to geothermal, solar, and wind. We are also the world’s leader in energy technologies like nuclear power.
The United States will become the world’s dominant leader in energy production. The first step will to undo the damage of the last 8 years. By 2030, the Obama-Clinton energy restrictions will eliminate another half a million manufacturing jobs, reduce economic output by $2.5 trillion, and reduce incomes by $7,000 per person.
The Trump Administration will unleash an energy revolution that will bring vast new wealth to our country. We will support coal production. We will support safe hydraulic fracturing. We will allow energy production on federal lands in appropriate areas. We will also open up vast areas of our offshore energy resources for safe production.
Lifting unnecessary restrictions on all sources of American energy (such as coal and onshore and offshore oil and gas) will (a) increase GDP by more than $100 billion annually, add over 500,000 new jobs annually, and increase annual wages by more than $30 billion over the next 7 years; (b) increase federal, state, and local tax revenues by almost $6 trillion over 4 decades; and (c) increase total economic activity by more than $20 trillion over the next 40 years.
The Trump Administration will ensure a reliable, streamlined regulatory and permitting process for energy infrastructure projects, and will work with their sponsors to find workable solutions so that worthy energy infrastructure projects can be completed on time and on budget.
Finally, a Trump Administration will support continued research into advanced energy technologies, but we will not be in the business of government picking winners and losers. We need to allow the free market and the innovative spirit of the American people to product the new energy technologies of tomorrow, without undue government interference.
The Penny Plan
The “Penny Plan” would reduce non-defense, non-safety net spending by one percent of the previous year’s total each year. For example, in FY 2016 non-defense discretionary spending is set at $518 billion. If spending is cut by 1%, it will be at $513 billion, a savings of $6 billion compared to the FY 2017 statutory spending level of $519 billion. This would be repeated every year.
No reductions to Defense spending.
Social Security, Medicare, and Medicaid would be exempted.
Over ten years, the plan will reduce spending (outlays) by $1 trillion.