“Trump or Clinton: Who Has the Superior Economic Plan?”
Ty J. Young Editorial
The mainstream media has been working overtime in an effort to distract voters from the critical issues we face as a country. Trump’s tax return from 1995 was illegally released to the public. This should unnerve and scare every American that such a release is even possible. His write-off of losses helped him avoid paying taxes that year … the same as Clinton who received a tax refund in 2015 (but not mentioned by the media). Trump has helped the media by continuing side-show fights with a former Miss Universe winner.
Despite the blatant media bias, the age-old saying will remain important to most voters in 2016 – “It’s the economy, stupid.” Most polling confirms the economy still remains the highest priority to the voters.
As Election Day draws near, most voters will be looking at the economic plans of the candidates when casting their vote.
So, what do the economic plans for each candidate entail and which is best?
I. The Trump Economic Plan:
1. Strong economic growth through lower tax rates. Simplifying the code with 12, 25 and 33% tax brackets, compared to our existing income tax brackets of 10, 15, 25, 28, 33, 35 and 39.6%. The lower rates for lower wage earners, and the simpler system, will boost productivity and help the middle class keep more hard earned income.
2. Strong economic growth through reduced regulation. There has been nearly 8 years of sub 2% growth (barely 1% growth over the last year), the worst labor participation rate since the 1970’s, large swaths of the adult population living off disability fraudulently and hourly productivity at its lowest levels since the 1970’s … What was the original, and by definition the most dynamic free market economy in the history of the world, has been mired in dysfunction during the Obama years. It has been held down by unneeded and unwanted regulation and oppressive government intrusion into the marketplace. Every facet of economic life has been burdened by the big government of the Obama Administration: from assaults on the market through regulation (Dodd-Frank), to cronyism and corruption (Solyndra), to an Environmental Protection Agency (EPA) out of control (the “War on Coal”). While jobs and incomes may have stabilized we still remain stagnant, debt-riddled, and much more insecure economically than ever before. Trump has promised government reform, massive deregulation, and a removal of government agencies from the marketplace. Capitalism will be returning to America!
3. America first in trade agreements. Trump believes free trade must also be fair trade. Our existing trade regime represents 20th century policy making and has resulted in jobs leaving America and not coming back. While we may not be able to reverse those losses, Trump has promised future trade agreements to be based upon what is good for America first. Yes, the North American Free Trade Agreement (NAFTA) and other agreements may have raised overall GDP numbers. But if that money is only going to the top 1%, and the middle class must give up their jobs, pensions, and way of life for the economic gains to accrue to the top of the earnings scale … that is not an agreement which benefits all Americans.
II. The Clinton Economic Plan:
1. Tax increases across the board for fairness. Clinton will increase the number of tax brackets we already have from 7 to 8. The highest tax rate under Clinton will be 43.6%. She will add a 4% surtax on all income above $5 million. Itemized deductions will be capped, and capital gains realized under 6 years will be taxed in a range from 24 to 39.6%. All Obama era tax increases will remain, including the Obamacare taxes and penalties. The estate tax will be applied to all income.
2. Bigger, smarter government, and punitive business regulations. Mrs. Clinton’s website and the material you can Google does not offer much guidance on how to increase economic growth. But what we can gather from her website and media is a $275 billion infrastructure project, and the usual promise of breaking Washington gridlock and red tape to help spur business expansion. The reality? There will be broader powers for the EPA, more Executive orders, and more regulation of our daily lives.
3. Continue current trade policies. Much like her economic growth plans, in order to keep her voting constituency intact, she has not said much that would ruffle Obama supporters. There have been some modifications, such as originally being for the TPP (Trans-Pacific Partnership), and now instead hinting she is against it. She rarely discusses her support of NAFTA as one of the signature features of her husband’s Presidency, despite calling it the “Gold Standard” earlier in the campaign season. The unwillingness to offer a clear message on what her trade policies would be suggests we would see more of the same globalist agenda that was pursued by her husband and continued under the Obama Presidency.
III. Who has the Best Plan?
1. Tax rates fall under Trump. This is easy – your taxes go down under Trump. Kennedy cut taxes – the economy grew, incomes went up, and tax revenue went up. Reagan cut taxes – the economy grew, incomes went up, and tax revenue went up. Bush 43 cut taxes – the economy grew, incomes went up, and tax revenue went up. The tax code will be simplified under Trump. You keep more of your earnings under Trump. You can find conservative analysts and pundits who argue that Trump’s plan increases the deficit because of the lower taxes, and therefore makes it more difficult to pay our bills, which many voters are rightly worried about. But that is not what history has shown. Lower tax rates have always meant more tax revenue – it increases productivity and taxable events. Furthermore, both candidates would have to reform all aspects of government taxation and government spending – they go hand-in-hand – in order to reel in chronic deficits. Trump’s tax plan focuses on growth, which even Clinton’s former Secretary of the Treasury and Democrat, Lawrence Summers, agrees must come first in order to fix our fiscal situation. Advantage Trump.
2. Growth is paramount in Trump’s policies. By all measurements, Trump’s plan leads to stronger, more robust growth, and will come close to matching the 3 to 4% growth rates achieved under Reagan and Clinton. What happens with the deficit remains an issue for both plans, but stronger growth will naturally result from substantial deregulation and a removal of government management of the economy. Furthermore, stronger growth will lead to more tax revenue coming in to pay down our deficits (if the politicians do not spend the additional revenue on something else, which has been the problem for nearly 100 years). Based on the data – advantage Trump.
3. Trade – it is a draw. Free trade can benefit everyone, but not when the rules that govern free trade favor one party over another. That, in essence, is not free nor is it fair trade. Despite Trump’s position in the campaign, it is hard to tear up trade deals unilaterally, or change the nature of economic transactions between countries overnight. Clinton has shared some of Trump’s Fair Trade rhetoric, despite a record to the contrary. While the Midwest manufacturing base of the country adores Trump’s tirades against the global elites, there are few manufacturing jobs returning overnight to the proverbial rust belt, even if we wanted them to. Having said that, both candidate’s positions are mixed, and because of that – it is a draw.
With former Secretary Clinton, it appears to be more of the same. This means potentially 8 more years of conflict, division, our lost place in the world, and economic stagnation. It also means no new ideas or new plans. Nothing new to change the status quo which the public is rightfully rejecting.
Trump has correctly pointed out our stock market is in a bubble – artificially propped up by government manipulation and Federal Reserve money printing. He has rightfully called out our current economic illness and his plan seems to address the largest issues holding the economy back – over regulation and over taxation.
Every major analyst has been seeing “headwinds” in the market. Intuitively, our readers know this has been a longer than usual stock market expansion. One that is held up by artificial support from the Fed and the government, not main street hiring more people and inventing new things to purchase. Regardless of who wins the election, these economic circumstances may call for moving your gains off the table and seeking principal protection assets.
When the stock market bubble Trump pointed out ultimately pops, will your retirement money be affected?
At Ty J. Young Inc., we specialize in helping people protect their hard-earned dollars against market losses while earning a reasonable rate of return. If you want to ensure your money is protected no matter what the outcome is of this election year, give us a call today at 877-912-1919.