5 Things You Need to Know About Donald's 'Economic' Plan

1. Tax brackets -- His new tax brackets are 12%, 25% and 33%. The current brackets are 10%, 15%, 20%, 25%, 28%, 33%, and 39.5%. Immediately, you'll notice that while he slashes the top marginal tax bracket, he has actually increased the lowest rate from 10% to 12%, and the next two lowest rates are also boosted from 15% and 20% upwards to 25%. The rich get richer while the poor get poorer! He justifies this simplification, saying, "Our current tax code is so burdensome and complex that we waste 9 billion hours a year in tax code compliance." But that's complete BS because reducing the brackets does not simplify the act of looking at the tax tables -- absent a flat tax, you still have a marginal tax that requires looking up on a table to see how much you pay, or if you're using a computer program the software automatically calculates it for you, making it no less simple than before.
2. Stimulus Spending on Infrastructure -- Last week, Donald made it known that his plan would include a $1T infrastructure spending plan, asserting that it was on par with what Bernie Sanders proposed. I had to laugh, therefore, when one of his own 'economic' advisers -- Stephen Moore -- suggested last Friday that the 2009 ARRA was ineffectual and therefore a waste of money. Note that the stimulus bill was less than what Donald is proposing, but that's not the real kicker. You see, conservative 'economists' such as Stephen Moore have argued in the past that stimulus spending crowds out private spending, regardless of whether or not the country is in a recession. And yet, we're approaching full employment and Donald is proposing a $1T federal spending package. Such hypocrisy!
3. Lower Corporate Tax Rate -- Donald proposes slashing the corporate tax rate from 35% to 15%. His stated goal is to eliminate inversions and increase domestic investment. This is Voodoo Econ 101, supply-side economics. According to conservatives, increasing the money supply should always increase economic activity. And yet, we have the Zero-Lower Bound (ZLB)! Corporations already have access to cheap (or free) money, and making it cheaper won't suddenly boost investment. Donald also suggests that this will help small businesses most, which is complete horse manure. According to the conservative Tax Foundation, there are more sole proprietorships than corporations, which means that income is passed through, not taxed at the corporate level. A cut in corporate taxes has zero effect on small businesses.
4. Tax Deduction or Credit? -- Donald also pretends to help out the poor and middle class by proposing to make the 'average childcare cost' fully tax deductible. In other words, you won't pay taxes on that portion of your income that is spent on childcare. Except, the poor and lower middle class already have economic support from the federal and state government on childcare, making this deduction worthless. More importantly, if Donald cared so much for the poor and middle class, why not make it a tax credit? A tax credit is money in your hands, not a tiny deduction off the top of your owed income, after all. The reason is, that Donald doesn't know how poor and middle-class actually live.
5. Trade Reform -- You should be wary of a guy promising to renegotiate existing (NAFTA) trade deals, when this guy has a terrible record on negotiations. The dude was so bad at negotiations, he lost money on many deals, including the most infamous debacle of his Trump Taj Mahal. Here's the problem with his boasts: Using tariffs as a leverage doesn't work nearly as well as has been implied, because tariffs work both ways, and cutting off trade in both directions results in higher consumer prices in both countries. That's the point of trade deals: To lower costs for everyone. It's not that I'm not open to renegotiating trade deals; it's that Donald has zero history as a successful negotiator, and contrary to what he says, his own actions show a terrible temperament to be a top negotiator.