Contact CU Independent News Staff Writer Paola Fernandez-Grados at firstname.lastname@example.org.
The Republican presidential debate on Oct. 28 at the University of Colorado’s Coors Events Center will revolve around economic issues, which means Donald Trump’s economic plan is under great scrutiny. Though he speaks of helping the middle class and cracking down on the wealthy, it remains to be seen if his agenda will ensure these changes. Here are the most important economic policies Trump has proposed:
Tax relief for “middle-class” Americans
If you are single and earn less than $25,000, or are married and jointly earn less than $50,000, you would be exempt from paying income tax.
A simplified tax code
All other Americans will get a four-bracket tax code — a zero percent rate for Americans earning $0 to $25,000, 10 percent rate for $25,001 to $50,000, 20 percent for $50,001 to $150,000, and 25 percent for $150,00o and up — instead of the current seven-bracket system. This plan would drastically lower income tax rates across the board.
A decrease in business taxes
No business of any size will pay more than 15 percent of their business income in taxes.
No family will have to pay the “death tax”
The often-called “death tax” is actually an estate tax that only a fraction of the richest American estates have to worry about. You get an estate tax on estates valued at about $5 million or greater.
A reduction of the top income tax from 39.6 percent to 25 percent
The top income tax rate applies to the highest incomes and highest tax bracket — which currently means around $250,000 and up, but would mean $150,000 under Trump’s plan. With this reduction, because the highest bracket amount is lowered and the rate is lowered as well, the rich get richer. The economy would become increasingly unequal between classes, according to Jeffrey Zax, a professor of economics at CU.
Elimination of the alternative minimum tax
The purpose of this tax is to ensure that people don’t take advantage of all the various loopholes in the tax structure that allow them to reduce their taxes unnecessarily, Zax said. Trump’s plan would remove that option.
Massive tariffs on China and Mexico
Trump wants to put tariffs on foreign goods and negotiate better trade deals. Theoretically, this would quickly start a trade war that would likely hurt American jobs and exports, according to CNN.
No changes made to the minimum wage
Trump would keep the minimum wage at $7.25 an hour.
Obamacare would be repealed
This would likely increase the deficit by $353 billion between 2016 and 2025.
What’s the overall effect?
In response to criticism regarding his economic plans, Trump says it’s fiscally responsible because it will minimize loopholes for the rich and force them to pay more. It will also bring U.S. money that’s parked overseas back to the homeland — with a one-time repatriation fee of 10 percent.
Others are skeptical. Lowering all corporate tax rates to 15 percent or less (the top rate is currently 39.1 percent) would appear to take overall tax rates for the rich in the other direction. Money brought back from overseas would barely make a positive dent in the deficit, much less account for all the changes Trump wants to make, Zax said.