Looking to reboot campaign, Trump to pivot to the economy

In what is being billed by the Trump campaign as a major economic speech, Donald Trump will call for, among other things, the elimination of the "death tax," a moratorium on financial regulations, and exempting child care expenses from taxes.

Bloomberg:

The Republican presidential nominee’s speech will focus on providing regulatory relief for small businesses, according to senior campaign aides familiar with its contents. More broadly, Trump will say he will not propose any new financial regulations until the economy shows “significant growth,” the aides said. Trump has previously said he would repeal and replace the 2010 Dodd-Frank Act.

Trump will also propose a repeal of the estate tax, sometimes called the “death tax.” Under current law, the 40 percent tax applies only to estates larger than $5.45 million for individuals and $10.9 million for couples.

For U.S. businesses, Trump will propose a tax rate of 15 percent and suggest strengthening intellectual-property protections. He’s expected to call for three income-tax brackets, down from the current seven. He’ll call for the elimination of special tax treatment for carried-interest income at private-equity firms and other investment firms—the latter of which is a proposal his Democratic rival also supports.

Carried interest, which is a portion of investment gains paid to certain investment managers, is currently taxed like capital gains—at rates that can be as low as 23.8 percent. Trump proposes to tax them as ordinary income, but for members of partnerships, that could actually mean a rate cut to 15 percent.

Trump will continue to stress his opposition to the proposed Trans-Pacific Partnership trade agreement backed by the Obama administration and many prominent Republicans in Congress, and he will reinforce his commitment to the coal industry, saying a federal moratorium on some coal-mining permits would be the focus of a targeted review in his administration.

Other items on his energy agenda, he is expected to reiterate in the speech, include asking TransCanada to renew its Keystone pipeline permit application; rescinding the Climate Action Plan and “waters of the U.S.” rule; opening offshore drilling; and killing the Paris climate agreement.

All of these ideas have been proposed before.  But Trump will almost certainly run into the same problem that business tax reformers, for example, have had to deal with; how to pay for the tax cuts.  Closing loopholes is a common suggestion, but one company's loophole is another's lifeblood.  Closing them has proven to be politically sticky.

There are already tax credits to help pay for childcare $3,000 per child.  Making all childcare expenses tax-exempt would triple that amount for most taxpayers a very expensive proposition, especially since there apparently won't be any ideas coming from Trump on how to pay for it.

With the deficit already beginning to climb toward a trillion dollars again, there is an urgent need to concentrate on deficit reduction.  But no politician running for president wants to get too far into how he would reduce the budget shortfall because it invariably involves pain for ordinary Americans.  It's far easier to offer goodies than it is to deal with an intractable problem like the deficit.

In what is being billed by the Trump campaign as a major economic speech, Donald Trump will call for, among other things, the elimination of the "death tax," a moratorium on financial regulations, and exempting child care expenses from taxes.

Bloomberg:

The Republican presidential nominee’s speech will focus on providing regulatory relief for small businesses, according to senior campaign aides familiar with its contents. More broadly, Trump will say he will not propose any new financial regulations until the economy shows “significant growth,” the aides said. Trump has previously said he would repeal and replace the 2010 Dodd-Frank Act.

Trump will also propose a repeal of the estate tax, sometimes called the “death tax.” Under current law, the 40 percent tax applies only to estates larger than $5.45 million for individuals and $10.9 million for couples.

For U.S. businesses, Trump will propose a tax rate of 15 percent and suggest strengthening intellectual-property protections. He’s expected to call for three income-tax brackets, down from the current seven. He’ll call for the elimination of special tax treatment for carried-interest income at private-equity firms and other investment firms—the latter of which is a proposal his Democratic rival also supports.

Carried interest, which is a portion of investment gains paid to certain investment managers, is currently taxed like capital gains—at rates that can be as low as 23.8 percent. Trump proposes to tax them as ordinary income, but for members of partnerships, that could actually mean a rate cut to 15 percent.

Trump will continue to stress his opposition to the proposed Trans-Pacific Partnership trade agreement backed by the Obama administration and many prominent Republicans in Congress, and he will reinforce his commitment to the coal industry, saying a federal moratorium on some coal-mining permits would be the focus of a targeted review in his administration.

Other items on his energy agenda, he is expected to reiterate in the speech, include asking TransCanada to renew its Keystone pipeline permit application; rescinding the Climate Action Plan and “waters of the U.S.” rule; opening offshore drilling; and killing the Paris climate agreement.

All of these ideas have been proposed before.  But Trump will almost certainly run into the same problem that business tax reformers, for example, have had to deal with; how to pay for the tax cuts.  Closing loopholes is a common suggestion, but one company's loophole is another's lifeblood.  Closing them has proven to be politically sticky.

There are already tax credits to help pay for childcare $3,000 per child.  Making all childcare expenses tax-exempt would triple that amount for most taxpayers a very expensive proposition, especially since there apparently won't be any ideas coming from Trump on how to pay for it.

With the deficit already beginning to climb toward a trillion dollars again, there is an urgent need to concentrate on deficit reduction.  But no politician running for president wants to get too far into how he would reduce the budget shortfall because it invariably involves pain for ordinary Americans.  It's far easier to offer goodies than it is to deal with an intractable problem like the deficit.