The Bare Facts Topic Number Two: Economy
Elizabeth Bachmann ’17
The Annual Growth Rate of the United States, or how quickly the economy is growing, is currently 1.4 percent, the lowest it has been since 2009, according to tradingeconomics.com. Secretary Hillary Clinton and Mr. Donald Trump both have strategies to reverse this trend.
Mr. Donald Trump plans to increase the United States Gross Domestic Product (GDP) Annual Growth Rate to an average of 3.5 or 4 percent per year. His strategy to accomplish this involves creating a pro-growth tax plan, rebooting the current regulatory system, formulating an America-First trade policy, introducing a “Penny Plan,” and utilizing American Energy, according to donaldjtrump.com.
Mr. Trump plans to cut taxes for all classes, but the biggest tax cut will be for the working and middle class. Middle class families earning between $50,000 and $70,000 per year will receive a 30 to 35 percent tax reduction. His plan also deducts average child care expenses for children ages 13 or younger.
Further, he will lower the business tax rate from 35 percent to 15 percent in hopes of bringing back US business from overseas. According to ctj.org, Fortune 500 companies alone hold $2.4 trillion offshore, so these tax cuts have the potential to introduce large amounts of money back into the US economy. However, if businesses choose to return offshore funds because of decreased rates, the Trump administration will charge companies with a ten percent repatriation tax, or a ten percent tax on that particular amount of money, a further bonus for the US treasury.
Additionally, Mr. Trump will offer the option for US manufacturers to immediately reinvest part of their yearly income into maintaining and building facilities, and purchasing new equipment. This income will then not have an imposed tax, according to donaldjtrump.com.
Finally, Mr. Trump will close tax loopholes that cost the US treasury $4 trillion between 2014 and 2018, according to bankrate.com.
He will change the regulatory system which affects businesses and costs the country $2.028 trillion dollars per year, according to nam.org. According to sensibleregulations.org, small business owners site the 3348 regulations currently in effect in the US as the top obstacle to conducting business. Mr. Trump will propose a ban on any new regulations not created by Congress or for the sake of public safety. He will also ask agency heads to compile a list of unnecessary regulations, which he will eliminate.
Mr. Trump intends to reduce the US trade deficit, which is estimated at $40 billion, according to tradingeconomics.com. He plans to renegotiate the North American Free Trade Agreement (NAFTA), which created a free trade zone between the US, Canada, and Mexico, but, as a result, shipped nearly 700,000 US jobs overseas, according to huffingtonpost.com.
Mr. Trump plans to utilize natural resources, such as oil, coal, and natural gas, which will make the United States energy independent, and create millions of American jobs.
“America’s incredible energy potential remains untapped. It’s a wound that is totally self-inflicted,” Mr. Trump said, at a North Dakota oil industry conference, according to CNN.
Mr. Trump will repeal most of President Barack Obama’s energy restrictions because he believes these rules are not effective. His plan will reduce jobs and economic output by $2.5 trillion, according to nuenergen.com. He will support coal, fracking, energy production on approved federal land, and promote research of advanced energy technologies.
According to Mr. Trump, these actions will increase GDP by 100 billion and create 500,000 jobs over the next seven years.
Finally, Mr. Trump plans to implement the “Penny Plan.” He will enact a one percent decrease in federal spending every year, without affecting defense, safety, or entitlement funds, such as Social Security and Medicare. In ten years, this will result in a $1 trillion decrease in federal spending, according to donaldjtrump.com.
Mrs. Clinton’s overarching goal is to create “an economy that works for everyone,” according to hillaryclinton.com. Her five step plan involves fighting for investments in infrastructure, manufacturing, research, technology, and small businesses in the first 100 days of her presidency. This includes making America a clean energy empire by ending the coal mining industry, which provides 80, 209 jobs, according to sourcewatch.org, and replacing it with clean energy. She will install half a billion solar panels across the United States, which she says will power every American home in ten years.
Her plan also involves creating strict trade policies that benefit US jobs and financial interests. This means rejecting the Trans-Pacific partnership, which would eliminate nearly 5 million US manufacturing jobs, according to citizen.org.
The second part of Mrs. Clinton’s plan focuses on tackling the tax issue. One of her primary concerns is to, like Trump, close tax loopholes that allow the wealthy to evade paying their share in taxes, and to regulate sheltered income. According to taxfoundation.org, the 35 percent US federal business tax, on top of the preexisting state business tax, is the fourth highest in the world. As a result, corporations tend to move their companies overseas to avoid these exorbitant taxes. Mrs. Clinton will charge an exit tax to dissuade these companies from leaving the US.
She will also simplify taxes for small businesses, and allow them to take immediate deductions for their expenses. Companies will be able to write off their yearly expenses from their income tax and receive full deductions that same year, rather than receive a percentage of the deduction over the next few years. This will promote small business growth, according to hillaryclinton.com.
She will also prevent multinational countries from practicing “earnings stripping,” or the movement of funds in order to take advantage of countries with low tax rates and then moving them again to exploit the United States’ large deductions. This plan will save the US treasury between $600 and $700 million a year, according to bloomberg.com. Furthermore, Mrs. Clinton will reward companies that bring money and jobs from overseas.
Thirdly, Mrs. Clinton will use the money procured from closing tax loopholes on the wealthy to fund debt-free college. The average student debt in the US in 2015 was $35,000, according to wsj.com, and Mrs. Clinton will work to allow students to refinance at lower interest rates or assume smaller monthly payments. She will also implement a graduated payment plan, meaning that people with lower incomes will pay less. She intends to improve the quality of public education from preschool through twelfth grade. According to Mrs. Clinton, this investment in American education will better prepare the next generation to join the workforce by equipping them with necessary skills.
Additionally, Mrs. Clinton will introduce a profit sharing plan to increase average income. Under this plan, employees of participatory businesses will receive direct percentage payments of their business’ profits along with their steady salary.
Businesses would then receive a two year tax credit equivalent to 15 percent of the money they share with their employees, according to hillaryclinton.com. But, Mrs. Clinton will cap the maximum tax break corporations can receive. To further serve the average working American, Mrs. Clinton will work to raise minimum wage and fight for equal pay.
Finally, Mrs. Clinton will focus on the needs and security of American families. She will do this, like Trump, by providing quality childcare for families. She will also expand Social Security, provide national healthcare, and cap prescription drug costs to make them more affordable, according to hillaryclinton.com.
Both presidential candidates will continue to inform the American people about their economic agendas before the election November 8.
– Elizabeth Bachmann, Content Editor
Victoria Allen • Oct 24, 2016 at 5:36 pm
A very well-written and carefully thought-out piece. Your lack of prejudice for one side or another is praiseworthy, too. These are contentious times, and remaining impartial is a tough job