Donald Trump has shocked the world as he won the presidency. Let’s take a closer look at his economic plans, as he discussed them on the campaign trail.
Some of Trump’s most prominent economic plans involve major tax cuts, which supporters say could create a bigger incentive for work and entrepreneurship. Critics say these cuts could cause the deficit to increase markedly, and require painful cuts in government spending.
Trump would reduce the top bracket’s tax burden from 39.6 percent to 33 percent. There are seven brackets overall; he would reduce them to three.
He would shrink the corporate tax rate from 35 percent to 15 percent, and all business income earned by individuals would fall under that lower rate.
Trump has also proposed eliminating the estate tax, which applies to estates worth more than $5.45 million. For married couples, it applies to estates worth $10.9 million.
He has proposed steep tariffs on goods from Mexico and China, and has generally taken an America-first approach to trade. He has opposed the proposed Trans-Pacific Partnership.
And Trump has proposed abolishing ObamaCare, replacing it with high-deductible insurance plans with health savings accounts.
Trump’s election comes as U.S. economic growth has been slow but generally trending upward. AIER’s index of leading indicators for September stood at 54, above the neutral level of 50. That was after several months of results between 38 and 50, as the economy slogged through months of uncertainty.
Bob Hughes, senior research fellow at the American Institute for Economic Research, said these proposals are merely a starting point for the discussion and debate that lies ahead. “Politicians can say things on a campaign trail that may motivate an electorate, but the reality of governing, developing actual legislation that needs the approval of Congress, can be a very different challenge.”
The first real signs of Trump’s policy agenda will be the people he appoints to his cabinet, Hughes said. “It will be interesting to see if he appoints negotiators and compromisers; pragmatists who are likely to get things done, or more confrontationists who are strong on beliefs but weak on practical solutions.”
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