Engineering Inc. - September/October 2016 - 12

DONALD TRUMP New Direction The Trump campaign calls for a "bold, simple and achievable [tax] plan based on conservative economic principles." This includes "tax relief for all Americans, especially the working poor and middle class, pro-growth tax reform for all sizes of businesses, and fiscally responsible steps to ensure this plan does not add to our enormous debt and deficit." The campaign outlines tax-code changes that would remove about half of current filers from income tax rolls and reduce the number of tax brackets from seven to four. Trump's plan also reduces or eliminates loopholes for the very rich and special interests. The campaign has offered few details. Implementation of Trump proposals administration would reduce federal revenue by $9.5 trillion in the first 10 years, with an additional $15 trillion decline in the next decade, according to "Analysis of Donald Trump's Tax Plan," by the Tax Policy Center. The majority of revenue declines would stem from tax cuts for individuals. The cuts would affect all income levels, but high-income taxpayers would see the largest reductions. For example, the highestincome 0.1 percent of taxpayers would see an average reduction of more than $1.3 million in 2017, nearly 19 percent of after-tax income, according to the Tax Policy Center report. Middle-income households would receive an average tax cut of $2,700-or 4.9 percent of after-tax income. Lower corporate income taxes and rate changes for pass-through businesses would account for approximately a third of the total tax cuts, the center estimates. The Trump plan proposes a tax rate of 15 percent for corporations and pass-through businesses. If enacted, the tax reforms could boost 12 ENGINEERING INC. SEPTEMBER / OCTOBER 2016 incentives to work, save and invest, the analysis concludes. However, the proposals also raise the specter of increased federal deficits. "Assuming the tax cuts are not offset by spending cuts, the national debt would rise by an estimated 39 percent of GDP in 2026 and by nearly 80 percent of GDP by 2036," the report says. "Offsetting a deficit this large would require unprecedented cuts in federal spending," with Congress facing reductions in projected program spending of 21 percent to prevent the plan from adding to the deficit in 2025, the analysis estimates. Infrastructure Trump says the nation's infrastructure would need at least twice the $500 billion investment proposed by his opponent. "I would say at least double her numbers, and you're going to really need a lot more than that," he said. The Republican nominee is proposing a trillion-dollar infrastructure rebuilding plan backed by a newly developed infrastructure fund. The fund would be supported by government bonds that investors and citizens could purchase, which he says would be particularly attractive now because interest rates the government pays to buyers of U.S. Treasuries are near record lows. "These would be bonds, and sold as bonds, so we'd do infrastructure bonds for the country," he said. Similar to some leaders in both parties, Trump has also said he would allow companies to repatriate capital from abroad at a low tax rate and use the money raised to fix bridges and roads. He also proposes that an independent commission decide which infrastructure projects get funded rather than politicians. JOE MAHONEY/GETTY IMAGES Tax Policy $ 2,700 average tax cut for middle-income households Trump believes his experience as a developer would allow him to more effectively rebuild the country's infrastructure "on time and under budget" than others. Health Care Echoing a pledge by many people in the Republican Party, Trump says the next president should "completely repeal Obamacare" and calls ACA an "incredible economic burden." Trump also advocates modifying existing laws that inhibit the sale of health insurance across state lines, as well as new rules for allowing individuals to fully deduct health insurance premium payments from their tax

Table of Contents for the Digital Edition of Engineering Inc. - September/October 2016