5 Key Points from Trump & Clinton's Economic Speeches
By Adam Uren | August 8 & 11, 2016 | SOURCE: BringMeTheNews
Our colleagues at BringMeTheNews have identified the 5 key points from both Donald Trump & Hillary Clinton's respective speeches on economic policy.
1) Tax cuts – but not as much as first planned
Trump released a plan in September that proposed cutting federal tax for America’s wealthiest earners from 39.6 percent to 25 percent.
However on Monday he changed that, CNBC reports, saying the top rate of income tax would be higher than first planned, set at 33 percent. The brackets for lower and medium earners would be set at 12 and 25 percent, respectively.
Analysts had said Trump’s earlier plans would increase the U.S. deficit by $10 trillion over the next decade, but the altered plans are expected to increase it by $3 trillion.
Trump did however re-affirm his plan to cap income taxes on businesses at just 15 percent. It currently varies between 15 and 39 percent.
2) Relief for childcare, end of estate taxes
Other tax proposals from Trump include bringing an end to the estate tax, as well as the exclusion of childcare expenses from taxation.
Currently, there is a dependent care tax credit to help with childcare costs, the maximum for which President Barack Obama wants to triple to $3,000 per child, the Wall Street Journal reports.
People can also currently pay for childcare using untaxed income via flexible savings accounts (FSAs), but contributions are limited to $5,000 a year.
3) Ripping up climate agreements, bring back Keystone
Gawker reports Trump is proposing to revive the controversial Keystone XXL oil pipeline project that had been vetoed by President Obama, as well as remove the U.S. from agreements to fight climate change by reducing emissions.
His energy policy would see him tear up the Paris Climate Agreementand halt U.S. payments to the United Nations’ global warming programs.
He would also lift all restrictions on U.S. energy generation, something he says would increase GDP by $100 billion, add 500,000 jobs, and increase tax revenues.
The New York Times adds that a moratorium on all new regulations from federal agencies could see a review of rules issued by the Environmental Protection Agency to curb carbon-dioxide emissions from power plants, as well as bringing more waterways and wetlands under federal protection.
4) Ending the ‘hedge-fund loophole’
Trump has called for the elimination of the carried-interest loophole, referred to as the “hedge-fund loophole,” which allows high earners to treat income as capital gains for tax purposes, the Atlantic reports.
The loophole allows hedge fund managers and private equity managers pay tax on their income at the capital gains rate of 15 percent, rather than the almost 40 percent rate of income tax, Business Insider notes.
In calling for it to be closed, Trump is in agreement with his opponent, Hillary Clinton.
5) Ending, changing trade deals
The North American Free Trade Agreement (NAFTA) between the U.S., Mexico and Canada, would be renegotiated under Trump, who says it’s the reason behind the decline in industry – particularly the auto industry – in the “Rust Belt” states of the Midwest, the Los Angeles Times says.
Gone would be the proposed Trans Pacific Partnership (TPP) between 12 North American, Asian and Australasian countries which Trump claims Clinton backs (she did initially, but in October said she opposes it as it “failed to meet her test of providing good jobs, raising wages and protecting national security”).
Trump says he would appoint trade negotiators who would “win for America” and apply tariffs on countries that cheat, NPR reports.
1) Big infrastructure investments – most of it private
In the first 100 days of taking office, Clinton intends to “break through Washington gridlock” to pass a $275 billion investment and jobs package.
Over five years, $250 billion would be invested in infrastructure, manufacturing, research and technology, and small businesses.
The remaining $25 billion would be used to create an “investment bank,” which would provide low interest loans and financial assistance to investors backing national infrastructure projects, in a bid to to attract a further $250 billion in private sector funding.
She also reaffirmed her opposition to the TPP trade deal – a deal she initially backed but U-turned on last year – which she says doesn’t “meet a high enough bar of creating good-paying jobs.”
2) Making America the ‘clean energy superpower’
Also included in her planned jobs package are investments in clean energy, which she sees as crucial to creating millions of jobs and businesses.
In the future, Clinton thinks, “some country is going to be the clean energy superpower of the 21st century”, adding: “It’s probably going to be either China, Germany, or America. I want it to be us.”
NPR reports this point contrasts completely with Trump’s plan, which would create more jobs by going back to old sources of energy (namely coal). It would also reduce regulation, allowing energy companies to increase their use of the fossil fuel, as well as promoting fracking.
3) Making college ‘debt-free’
Bernie Sanders won a lot of support from young voters by pledging to make college education free, and his surge in the Democratic race appears to have had some impact on Clinton’s policy.
While not offering free tuition, Clinton does want to provide options for Americans from lower- and middle-class families to attend public colleges or universities in their state, where they can graduate without taking on any student debt.
Under this plan, she says families with income up to $125,000 will not pay tuition at in-state four-year public colleges and universities by 2021; and families with less than $85,000 income will be able to access these programs immediately.
She also wants to make it easier for those who do incur debts to pay them off, by offering 40 million Americans with student loans the option to refinance at lower rates.
4) Tax the rich, crack down on Wall Street
Having been criticized by Sanders (and Trump) in the past for her close ties to Wall Street, Clinton is vowing to close the “carried interest loophole” that allows hedge fund, venture capital and private equity managers to pay tax at a lower rate than the middle classes. They often do this by classifying their incomes as capital gains.
Trump vowed himself to close the loophole, which he dubbed the “hedge fund loophole” during his Monday speech.
Clinton has also pledged to increase taxes of the mega-rich, imposing the “Buffett Rule” that requires people with incomes of more than $1 million to pay a minimum of 30 percent tax on that income, and imposing a 4 percent surcharge on incomes over $5 million.
In exchange, she will offer tax relief to the middle classes in areas such as child care, health care and education.
5) Paid family leave, continuing the Affordable Care Act
Clinton has been a firm backer of President Obama’s controversial “Affordable Care Act,” which aimed to get millions of uncovered Americans affordable health insurance. This had the effect of pushing up insurance costs of the majority of other Americans – though the New York Times recently noted it might also be making some people healthier.
She plans to defend the health care overhaul from Republican attacks, while at the same time pledging to bring down out-of-pocket costs such as copays and deductibles, as well as reduce the cost of prescription drugs, which she says rose by 12.6 percent in 2016.
She will also ensure woman feel comfortable staying in the workforce after having a child by guaranteeing up to 12 weeks of paid family and medical leave for a new child or a seriously ill family member, which she will pay for by the money made from the taxing the wealthy.
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