(Bloomberg) Donald Trump on Monday sought to cast Hillary Clinton’s economic program as an ineffective relic, and to reset his own presidential campaign after a string of missteps.
“We now begin a great national conversation about economic renewal for America,” Trump said in a speech to the Detroit Economic Club, urging a return to his “America-first” governing vision.
“The city of Detroit is the living, breathing example of my opponent’s failed economic agenda,” Trump said.
The nominee proposed a temporary moratorium on new agency regulations. He also proposed making U.S. families’ child-care costs tax-deductible, which his daughter Ivanka promised last month in a prime-time speech at the Republican National Convention.
Protesters repeatedly interrupted Trump, who acknowledged them more calmly than he sometimes has at campaign rallies. “This is all very well planned out,” he said.
33% Tax Rate
Trump said he would set a new top individual income-tax rate of 33 percent, a key change from earlier versions of his platform. While that rate is higher than the 25 percent rate Trump had initially proposed, it still represents a cut from the current top rate of 39.6 percent.
That change will reduce the estimated cost of Trump’s tax plan—which some analysts had set at roughly $10 trillion over 10 years. But the child-care proposal—which Trump said would allow parents to fully deduct the “average cost” of the service—also represented a new expense. The measure’s price tag would be roughly $20 billion a year, said economist Stephen Moore, a Trump adviser.
“It's not a big cost,” Moore said.
Trump’s plan would slash the tax rate on corporate and business income to 15 percent, down from a current top corporate tax rate of 35 percent. It would also consolidate the current seven individual income tax rates to three, with the lower two brackets set at 25 percent and 12 percent.
A news release from Trump’s campaign said he wanted to ensure that the wealthy pay their “fair share,” using language that is more commonly heard from Democrats. But his proposals to cut individual tax rates and the tax rate on income from partnerships—along with eliminating the estate tax—mean the wealthy would pay less under his plan, said Kyle Pomerleau, director of federal projects at the conservative Tax Foundation.
“His rhetoric is not lining up with his proposals,” Pomerleau said.
Some analysts have noted that Trump’s proposal to end the special tax treatment of carried interest—the portion of investment gains paid to fund managers—might mean lower taxes for members of partnerships, which is how many private-equity funds are organized.
Carried interest is currently taxed as capital gains, meaning the income qualifies for a tax rate as low as 23.8 percent. Under Trump’s plan to cut business taxes, though, members of partnerships who get carried interest might be taxed at a 15 percent rate.
Middle Class
The speech, which Trump read off a teleprompter, was a product of consultation with his economic advisers, led by policy director Stephen Miller.
Trump accused Clinton of admitting she wants to raise middle-class taxes, which her campaign disputes. In a line that is difficult to hear clearly on tape, Clinton said at a recent event that “we aren’t” going to raise middle-class taxes, the nonpartisan fact-checker
“Recently, at a campaign event, Hillary Clinton short-circuited again—to use a now-famous term–when she accidentally told the truth and said she wanted to raise taxes on the middle class,” Trump said, referring to the “short-circuited” phrase Clinton used when answering a journalist’s question about her private e-mail server last week.
Trade and Energy
Trump reiterated his opposition to the Trans-Pacific Partnership trade deal and his desire to renegotiate NAFTA, “or walk away if we have to,” according to his campaign’s news release. He also seeks to reverse much of the Obama administration’s climate-change and energy agenda by defending the coal industry, rescinding environmental rules, and asking TransCanada to renew its Keystone pipeline permit application if he’s elected.
After Trump said Aug. 2 he would double Clinton’s infrastructure spending plan in a major government expansion, aides said he will speak later this summer about his plan for the nation’s roadways.
Child Care
Trump’s daughter’s acknowledgement of soaring child-care costs, an issue of growing importance in U.S. politics, won plaudits as Trump lags Clinton badly in polls of female voters.
Child-care bills have proven to outpace rent and tuition costs in most U.S. states, often threatening to derail parents’ housing and job plans. The nation is the third-most expensive for childcare among 34 countries, according to 2012 data from the Organization for Economic Cooperation and Development.
The issue offers a good example of the candidates’ different approaches. Where Trump is providing a simple supply-side prescription, Clinton is flooding the debate with detail.
Her proposal includes tax relief but is more focused on government support and broader investments in early childhood education, while pledging to ensure that no family has to spend more than 10 percent of income on high-quality care.
Steadying Course
Trump’s speech follows his announcement last week of an unorthodox economic advisory council that includes financiers John Paulson, Andy Beal, and Stephen Feinberg, as well as energy executive Harold Hamm. Trump also announced raising $80 million for his campaign and party entities in July.
Unveiling the council and the better-than-expected fundraising results, and giving the Detroit speech major billing, were moves by the Trump campaign to steady its course after the Democratic National Convention, where the Muslim parents of a slain U.S. soldier spoke out against Trump and drew the Republican nominee into a multi-day feud on Twitter and TV airwaves.
Between that and other controversies—including Trump’s initial refusal to endorse House Speaker Paul Ryan for re-election—Trump has seen his poll numbers slumped and has worried Republicans who are eager to save their majorities in Congress in November’s elections.
Trump’s plans align in many ways with the election-year policy proposals rolled out by Ryan and House Republicans, including his call for undoing the 2010 Dodd-Frank Act and limiting any regulations that burden businesses. The House plan wouldn’t allow any new financial regulations to take effect unless the House votes.
Trump, however, has proposed deeper tax-rate reductions. Under the House plan, corporate tax rates would be lowered from 35 to 20 percent.
—With assistance from Billy House, Lynnley Browning, and Michelle Jamrisko.
