First 100 Days
On November 22, Trump promised to make the following Executive Orders. First, withdraw from the Trans-Pacific Partnership. He will replace it with a series of bilateral agreements that protect American jobs.That means eleven new agreements with the other signatories.
Second,
cancel restrictions on shale oil, clean coal, and other energy
production. Third, any federal agency that proposes a new regulation
must identify two existing ones that will be eliminated.Fourth, ask the Defense Department to develop a plan to protect the nation's infrastructure from cyber-attacks. Fifth, ask the Labor Department to identify any abuse of the nation's visa program.
Sixth, propose a five-year ban on executive officials becoming lobbyists. (This was also proposed by Obama during his 2008 campaign.) There will be a lifetime ban for any executive lobbying on behalf of another country.
Trump has the support of the Republican-controlled Congress. That makes it more likely his other measures will get passed. Here is Trump's economic plan, and how it will impact you.
"5-Part Tax Plan"
Eliminate the marriage penalty, the Alternative Minimum Tax, and the inheritance tax. Quadruple the standard deduction. Trump also added a childcare deduction.
It would allow parents to deduct
the average cost of childcare expenses. (Source: "An America First
Economic Plan," Donald J. Trump. "Donald Trump Just Made Major Changes
to His Tax Plan," CNBC, August 8, 2016.)
| Current Income Tax Rate | Trump's Tax Plan | Income Levels for Those Filing As: | |||
|---|---|---|---|---|---|
| Income | Cap Gains | Single | Married-Joint | ||
| 10%-15% | 12% | 0% | $0-$37,500 | $0 - $75,000 | |
| 25%-28% | 25% | 15% | $37,500 - $112,500 | $75,000 - $225,000 | |
| 28%-39.6% | 33% | 20% | $112,500 + | $225,000 + | |
Lower the maximum small business and corporate tax rate from 38 percent to 15 percent. Get corporations to bring money back into the United States. Keep companies in this country. The United States is the highest taxed nation in the world. He would get the right people into the room, and get all to agree how to do it.
The effective tax rate is only 15 percent. That's because most corporations have figured out how to avoid it. Nearly half pay no taxes at all since they pass those taxes to their shareholders. A lower corporate tax rate would increase profits without necessarily creating new jobs. That's because supply-side economics doesn't work at today's relatively low tax rates. (Source: "Donald Trump Tax Reform," OnTheIssues.org.)
The taxes for the rich would go up somewhat. If I increase it on the wealthy, they're still going to pay less than they pay now. Trump has given conflicting statements on how his tax plan will affect high-income taxpayers (the top 20 percent).
They would receive a 9.5
percent decrease in the tax rate. (Source: "Donald Trump Tries to Clean
Up Economic Comments," CNN, May 10, 2016.)
End tax deferral on the $5 trillion in corporate cash held abroad. Allow a one-time repatriation that will be taxed 10 percent. Eliminate loopholes available to the very rich and corporations, such as the exemption on life insurance interest. Steepen the curve of the Personal Exemption Phaseout and the Pease Limitation on itemized deductions. Phase in a cap on business interest expenses. (Source: CNBC Interview, March 10, 2016. "Tax Reform," DonaldJTrump.com.)
Eliminate the "carried interest" deduction. It allows managers of hedge funds and private equity funds to be taxed at the capital gains tax rate (15 percent) instead of the income tax rate (39.6 percent). (Source: "Hedge Fund Managers Are Getting Away With Murder," Fortune, August 24, 2015.)
To find out how this plan will affect you, see Trump's Tax Plan.
"Cut Government Spending"
Make the U.S. military so strong no one will mess with us. Get more equipment. Bomb ISIS and send troops to Syria. Cancel Iran nuclear deal. Use Russia as an ally in Syria. Use waterboarding. Use military force against terrorists' families. Opposed Iraq war. In a November 22 interview with the New York Times, Trump said he no longer supports waterboarding. He based his change of heart on a conversation with retired Marine Corps General James Mattis. He also said he might appoint his son-in-law, Jared Kushner, as a special envoy to broker peace between the Israelis and Palestinians. (Source: "Donald Trump on War & Peace," "Donald Trump on Homeland Security," OntheIssues.org. "Donald Trump and the Defense Budget," National Interest.org, December 30, 2015.)Cut defense spending, but 3 percent of GNP for military spending is too low, it should be 6.5 percent. U.S. military spending is almost $800 billion a year. It's larger than anything other government expenditure except Social Security at $967 billion. It's bigger than the deficit of $503 billion. It's greater than those of the next ten largest spenders combined. It's four times larger than China's military budget of $216 billion. It's almost ten times bigger than Russia's budget of just $84.5 billion. According to the Center for International Policy, Trump's defense budget could be $90 billion more than Obama's most recent budget request.
Reform the Veteran's Administration. Give veterans vouchers to use either with the VA or their own doctor. That competition would give the VA an incentive to improve service. The VA would provide transitional benefits, such as business loans, job training, and placement services, to help veterans find jobs. Increase funding for battle-related mental and chronic illness. Add OBGYN and other women's health services to every VA hospital. Fire corrupt VA executives. Change the culture of the VA to reduce inefficiencies. These programs would work and are sorely needed. The VA budget ($75.1 billion) is only 10 percent of total military spending. Many vets are traumatized and don't receive the care they need. As a result, ten percent of the homeless population are veterans who suffer from Post-Traumatic Stress Disorder or other war-related injuries. (Source: "Veteran's Administration Reforms," DonaldJTrump.com.)
Update medical technology. That's already happened. It's one of the three largely unknown benefits of Obamacare.
Reduce the deficit by cutting waste. Trump would have to cut $500 billion in waste to eliminate the current budget deficit. That's a 12 percent cut in the $4.147 trillion budget he will inherit from President Obama. As any business owner knows, a 12 percent cut is doable but extremely painful. For more, see 5 Myths About Cutting Government Spending.
Eliminate the Department of Education and the Environmental Protection Administration. That might save $69.4 billion for Education, unless Trump reprogrammed the funds for education block grants for the states, as he mentioned elsewhere. Defunding the EPA would only save $8.3 billion and who would enforce the existing laws?
Keep existing Medicare and Social Security benefits intact. These benefits were created by prior Acts of Congress and cannot be changed by a President. Social Security is self-funded until 2035. Medicare is only 53 percent self-funded. These two programs cost $1.565 trillion, or 38 percent of total spending. For more, see Mandatory Budget.
Repeal and Replace Obamacare
Allow health insurance companies to operate across states lines. Remove the mandate to buy insurance. Allow tax deduction for health insurance premiums and Health Savings Accounts. Expand Medicaid to all states by making it a block grant program. Allow consumers to purchase drugs overseas. Offer a universal “market-based” plan that would provide a range of choices similar to the Federal Employees Health Benefits Program. The universal health care plan is what Obama initially proposed, and Congress rejected. Here is more on Trump's Health Care Plan. (Source: "Healthcare Reform," DonaldJTrump.com. "Donald Trump Health Care," OnTheIssues.org. "Donald Trump Hates Obamacare ," July 31, 2015.)"Smart Trade, Not Stupid Trade"
Do a better job of negotiating trade agreements. China taxes our exports, but we don't tax its exports. That's true to some extent. China requires American companies to set up factories to hire and train local workers before they can sell to its market. The United States could easily do the same thing. See more about China's economy.Renegotiate NAFTA with smart and cunning people. If Trump re-opens negotiations on NAFTA, the Mexican government would immediately require that the United States allow Mexican trucks on its roads. That was promised in the first NAFTA agreement but withdrawn by Congress. Mexico is in much better economic shape now than when the three countries first negotiated NAFTA. For that reason, a new agreement would be worse for the United States, no matter how smart and cunning Trump's people are. (Source: "Trump: NAFTA Trade Deal a Disaster," Associated Press, September 25, 2015.)
Here's What Happens If Trump Dumps NAFTA.
Label China a currency manipulator. Trump claims that China artificially undervalues its currency, the yuan, by 15 percent to 40 percent. Part of China's cost advantage is its cheaper standard of living that allows lower wages. Trump ignores that. He incorrectly rails against the yuan's fixed exchange rate that's pegged to the dollar. In 2000, the yuan was undervalued by 30 percent. But a lot has changed since then. First, former Treasury Secretary Hank Paulson convinced the People's Bank of China (PBOC) to increase the yuan's value against the dollar. It increased 2-3 percent annually between 2000 and 2013.
Second, the dollar has strengthened by 25 percent since 2014, taking the Chinese yuan with it. Now China's products cost that much more than its Southeast Asian competitors. In August 2015, the PBOC began to carefully let the yuan/dollar exchange rate float in the free market. The yuan immediately plummeted. If the yuan were undervalued, as Trump claims, it would have risen instead. Now, China's central bank is forced to take extreme steps to keep it propped up. That's why many economists now think China's currency is over-valued, not under-valued as Trump claims. For more, see Dollar to Yuan Conversion and History.
Impose countervailing duties on all imports from China. The United States imports $481.9 billion in consumer electronics, clothing, and machinery from China. A lot of those "imports" are from U.S. corporations that send raw materials to China, and ship them back when they are completed. Trump's tariffs would reduce profits for these American firms and raise prices for American consumers. China might retaliate, raising its tariffs on imports from U.S. companies. For more, see U.S. Trade With China. (Source: "U.S.-China Trade Reform," DonaldJTrump.com.)
Hit Mexican imports with a 35 percent tariff. The United States imports $294.7 billion from Mexico, nearly as much as from China. Trump's tariffs would increase prices of the manufactured products, fruits, vegetables, coffee, and cotton we import from Mexico. Tariffs would benefit U.S. oil companies by raising prices on imported Mexican oil. By law, President Trump could only raise tariffs by 15 percent for 150 days without Congressional approval. For more, see U.S. Imports by Year by Country. (Source: "Trump's Trade Policy Is a Big Loser," USNews, April 19, 2016. "So What Exactly Is Donald Trump's Economic Policy?" CNN Money.)
Trump advocates a protectionism that does not work in today's globally integrated economy. Other countries would retaliate, reducing American exports. It would also raise prices for American consumers. One reason for slow U.S. growth since the recession is that international trade hasn't rebounded. Tariffs and a trade war would only worsen that.
"Be the Greatest Job-Producing President in U.S. History"
Trump would have to create more than 22.3 million jobs to take that title. That's how many jobs President Obama created from the depths of the recession in January 2010 to the end of his term. President Clinton increased jobs by 19.6 percent. Trump would have to create at least 29.3 million jobs to beat that record. For more, see Job Creation by President.Create jobs by eliminating outsourcing and bringing jobs back from Japan, China, and Mexico. Trump correctly identifies the problem. The U.S. lost 34 percent of its manufacturing jobs between 1998 and 2010. Many were outsourced by U.S. companies to save money. Others were eliminated by new technology, including robotics, artificial intelligence, and bio-engineering. Government-sponsored training for these specialties might create more jobs for U.S. workers than Trump's trade war. For more, see 3 Ways to Fix IT Outsourcing.
Keep the U.S. minimum wage where it is so U.S. companies can compete. The dollar rose 25 percent since 2014. That automatically makes U.S. workers 25 percent more expensive than those in India, Mexico, and other countries whose currencies have fallen. Since China's currency is fixed to the dollar, its labor costs have also gone up 25 percent. Although this situation is temporary, it is still a bigger drag on U.S. competitiveness than raising the minimum wage. The U.S. minimum wage is $7.25 an hour, although many states with higher cost-of-living have mandated a higher wage. Ireland, the UK, Australia, and six European Union countries have a higher minimum wage than the United States. For more, see Minimum Wage Pros and Cons.
Spend $1 trillion to rebuild U.S. infrastructure. That's $100 billion a year for ten years to repair America's aging roads, bridges, and airports. That's more than Obama's Economic Stimulus Plan, which spent $261 billion in four years on shovel-ready projects. Construction is the most efficient use of federal dollars to create jobs. A U Mass/Amherst study found that one billion dollars spent on public works created 19,795 jobs. That's better than defense spending, which created 8,555 for the same amount. (Source: "Trump's $500 Billion Infrastructure Promise Creates Metals Rally," Bloomberg, November 9, 2016.) For more, see 4 Best Real-World Ways to Create Jobs.
The U.S. jobs report is not a real number. The true unemployment rate is 18 percent, not 5 percent. The real unemployment rate includes those who are marginally attached or discouraged and part-time workers who would prefer full-time jobs. As of February 2016, that rate was 9.9 percent, not the widely-reported 4.9 percent. The worst real unemployment rate was 16.7 percent in January 2010, compared to 9.8 percent for the widely-reported rate. The real unemployment rate is typically double the widely-reported current unemployment rate.
Reduce regulations that restrict business growth. Ask federal departments for a list of wasteful regulations to be eliminated. Issue a temporary moratorium on new regulations. Cancel all executive orders. Eliminate Waters of the U.S. Rule and Clean Power Plan. The National Association of Manufacturers said that industry regulations cost $180 billion a year. Its studies show that U.S. manufacturing costs are 20 percent higher than other countries. (NAM wants to expand, not end, free trade agreements.) Trump named Steve Mnuchin to be his U.S. Treasury Secretary. He promised to loosen Dodd-Frank regulations that prevent banks from lending to small businesses. He said the Volcker Rule is too complicated. (Source: "Parts of Dodd-Frank Will Be Rolled Back Under Trump," CNBC, November 30, 2016.)
Find out Can Trump Bring Back American Jobs?
"Reduce the Debt by Growing the Economy 6 Percent"
Grow the economy by 6 percent annually to increase tax revenues. That's too fast for healthy economic growth. It would create inflation, a boom-bust cycle, and then a crash. For more, see What Is the Ideal Growth Rate?Reduce the debt by eliminating waste and redundancy in federal spending. Trump demonstrated this in his campaign by using Twitter instead of expensive PR campaign. His emphasis on finding ways to contain the costs is one of his strategies outlined in his book The Art of the Deal. (Source: "Donald Trump's Campaign Blueprint: His Own Book," The Wall Street Journal, Monica Langley, March 2, 2016.)
Borrow knowing that if the economy crashed, you could make a deal. U.S. will never default because you can print the money. These are the most dangerous statements Trump has uttered. The first one is blatantly untrue. If the economy collapsed, there would be no one to make a deal with. It would send the dollar into a collapse. That would send the entire world into another Great Depression. The second comment would send the dollar back into decline. Interest rates would rise as creditors lost faith in U.S. Treasuries. That would create a recession.(Source: "U.S. Will Never Default Because You Print the Money," CNN, May 10, 2016. "Donald Trump's Economic Plans Would Destroy the Economy," The Atlantic, May 8, 2016.)
See how Trump's Debt Reduction Plan Instead Adds $5.3 Trillion
"Send Illegal Immigrants Back"
Erect a 1,000 mile wall on the Mexican border, and force Mexico to pay for it. Open a door for legal immigrants. Deport the two to three million illegal immigrants that have criminal records. Ensure that open jobs are offered to American workers first. The wall would include some areas of fencing, where appropriate. Trump initially promised to make Mexico pay $5 billion to $10 billion pay for the wall. If it refused, he would threaten to change a rule under the USA Patriot Act antiterrorism law. That would confiscate Western Union money transfers sent to Mexico from illegal immigrants. The Mexican central bank reported that $25 billion was sent from abroad. There are no exact figures on how much of that is from U.S. illegal immigrants. (Source: " Trump Reveals How He Would Force Mexico to Pay for Border Wall," The Washington Post, April 5, 2016.)On January 6, 2017, Trump asked Congress to appropriate the money in April to pay for the wall. He would ask Mexico to pay for it at a later date. (Source: "Trump Asking Congress, Not Mexico, to Pay for Border Wall," CNN Politics, January 6, 2017.)
The Department of Homeland Security reported in 2013 that there were 1.9 million "removable criminal aliens." That included both legal and illegal immigrants. That's fewer than the 2.4 million deportations during the Obama administration. In 2015, 91 percent had criminal records. But Trump promises to do it "immediately." As Mexico's economy improves, it's begun gaining immigrants itself. Since 2000, more Americans have immigrated to Mexico than the reverse. For more, see Mexico's Economy. (Source: "Trump Plans to Immediately Deport Two Million to Three Million Undocumented Immigrants," The Washington Post, November 14, 2016.)
CEOs in Silicon Valley worry that Trump might restrict the H-1B visa program. It allows 315,000 foreign workers to fill many of their jobs. In 2014, 65 percent of all these visas were for computer-related jobs. These companies could lose market share, and valuable employees, if the H-1B visa program is threatened. (Source: "Donald Trump's Anti-immigration Stance Threatens the Heart of American Innovation," The Verge, November 11, 2016. "If Donald Trump Was President, Here's What Would Happen to the U.S. Economy," The Street, March 3, 2016.)
How does Trump's Plan compare to Hillary Clinton's economic plan?
