Seeds: Donald Trump’s history as a successful businessman is well known. He has used this success as a talking point, stating that it’s thinkers like him who America needs if we want to be “great again.” He discusses his wealth a lot, specifying how proud he is of his hard work, using this as proof that he has earned his wealth. It should be noted that Trump’s father started him out with what Trump proclaimed was a “small loan of 1 million dollars.” Whether or not you think this is significant in the grand scheme of his wealth is up to you.
Core: Here are a few of the main points of his plan, condensed.
He calls for three tax brackets.What this means: Trump’s plan would mean that many Americans do not pay any income taxes because they would make a little enough amount that they would not qualify. Currently in the US there are seven tax brackets for income tax; they are designed to gradually increase the percentage that one pays based on how much they earn each year, given that for someone who earns $50,000, 39% of their annual income significantly impacts their quality of life compared to 39% of someone who earns $500,000.
He calls for lowering of corporate income taxes, but ridding of the Carried Interest Deduction.What this means: He wants to reduce corporate income taxes from 35% to 15%, which he says will help small businesses the most. He says that this will allow for more jobs and stimulate the economy. Getting rid of the Deduction, a so-called “tax loophole,” will prevent hedge funds and private equity firms (essentially businesses and companies that are often extremely wealthy) from amassing great amounts of wealth without being taxed the same way any other portions of their wealth would be. For more info on this: here.
He calls for an end of the Estate tax, otherwise known as the death tax.What this means: This would mean that the government cannot tax the amount of money your family or beneficiary would receive after you die. However, this tax only applies to people whose gross estate (the value of all of your possessions and the money in your accounts) is worth more than $5.45 million. Less than 1 in 500 people paid this tax last year.
There is a lot more to his proposal, and if you want to learn more, refer to the links under “Still Hungry” below.
Leaves: Last Friday Trump released a list of his economic advisors, only one was an academic economist and the others were businessmen. Some economic analysts are saying that many of his policies are very traditional Republican ideas, and are unlikely to benefit anyone besides the upper-middle and upper classes. Others argue that his plans, while in the short run may benefit the wealthier, in the long run they will stimulate the economy and in effect increase jobs and help lower-income individuals (this is one of the basic principles of trickle-down economics).
Food For Thought: Do you think Trump’s plan would be beneficial for America? Who are you voting for? Don’t know? We’ve got you.