Trump v Clinton: Comparing their economic plans
16 September 2016
Donald Trump and Hillary Clinton have laid out their visions for the US economy and, unsurprisingly, they are very different. Mr Trump is focusing on cutting taxes, eliminating regulation and ending trade deals. Mrs Clinton, on the other hand, wants to raise taxes on the wealthy, increase spending on job training and lower taxes on companies that hire more Americans. Here are some of the ways they differ. Mr Trump favours cutting taxes for everyone and reducing the number of tax brackets from seven to three. He would reduce the top rate of tax to 33% from 39.6%. Mrs Clinton would keep taxes the same for most Americans but add an additional bracket for the highest earners. The income from that would be used to pay for programmes like free university education for students from low- and middle-income families. Her campaign is calling the higher taxes on the wealthy - 4% on people who earn more than $5m - the "fair share surcharge". Both candidates have proposed closing tax loopholes that typically favour the rich. Mr Trump proposes a child care deduction that would cover the average cost of child care, while Mrs Clinton favours limiting the number of deductions taxpayers can claim at 28%. Tax deductions allow people to subtract some of the income they are taxed on - effectively lowering which bracket they fall into. They typically favour the rich who can take more, while the 43% of Americans who currently pay no income would be unaffected by the change. Mr Trump also proposed eliminating the estate tax or "death tax" completely. The tax only applies when a family member passes on more than $5.45m worth of assets to an individual or $10.9m to a married couple. The Republican candidate said he would also reduce the US corporate tax rate to 15% from the current rate of 35%, one of the highest in the world. Mr Trump's campaign said the plan would reduce the amount of income the government collected by $4.4tn over a decade. This is far below the $9.5tn calculated by the nonpartisan Tax Policy Center in August.  The Center said Mrs Clinton's plan would add $1.1tn in revenue over the next 10 years. Neither candidate has proposed significant reductions in spending on public pension and healthcare programmes like social security, Medicaid and Medicare. The funding needed for those is expected to balloon over the next decade and its unclear where the money to pay for them will come from without tax increases. An analysis performed by Tax Foundation last month found that while Mr Trump's plan would lower taxes for all Americans it would lower them most for the highest earners. Mr Trump has done his best to capitalise on the discontent around trade deals. His economic proposal suggests renegotiating trade deals using "negotiators whose goal will be to win for America". He has not spelt out what that "win" looks like, but he has promised to step away from deals like the North American Free Trade Agreement (Nafta) if a good deal cannot be reached. Mr Trump has also promised to get tough with countries that violate trade agreements, applying new tariffs and pursuing cases against them in the World Trade Organization. He has specifically said that he will label China a "currency manipulator". Mr Trump has called for a 35% tariff on Mexican goods and a 45% tariff on Chinese goods. That would mean a $100 television from Mexico would cost $135. This could encourage US consumers to buy more products made in America, but it would also likely encourage Mexico to place an import tax on US goods, making it hard for US companies to sell their goods abroad. Mexico purchased $267.2bn in US goods in 2015, making it the second largest export partner for the US. Mrs Clinton has said these tariffs will lead to a trade war making it harder for the US to compete on a global stage. Clinton has gone back and forth on trade. She previously supported the Trans-Pacific Partnership (TPP) but has said in her campaign that she doesn't think it's the best deal for America. Her plan focuses more on increasing production in the US by offering tax incentives to companies that build there rather than barring imports out. While she has criticised some trade deals, she hasn't ruled out signing new ones if elected. Trump on trade - Renegotiate trade deals to favour the US - Walk away from trade agreements if a good deal can't be reached - Add tariffs on some of the America's largest trading partners including Mexico and China Clinton on trade - Changed her mind on TPP, which she helped negotiate - In 2007 criticised trade deal with South Korea, then supported it as Secretary of State - Supported Nafta but has since been critical of it Both candidates have promised to put Americans back to work, though unemployment has hovered around a low 4.9% since the beginning of the year. Mr Trump's employment plan focuses on encouraging more businesses to open in the US. He has suggested that investing in infrastructure, cutting the trade deficit, lowering taxes and removing regulations will make it easier for companies to hire. Mr Trump has focused mostly on increasing manufacturing jobs, which have declined by around 5 million since 2000. Much of that decline has been caused by improvements in technology, however, not outsourcing. He has promised to create 25 milli on jobs over 10 years and achieve annual economic growth of 3.5%. US GDP growth reached 2.4% in 2015. Mrs Clinton's policy for jobs growth is a little more specific. She has called for increasing jobs training - in part paid for by tax revenue from wealthier Americans. She has pushed for infrastructure spending and investment in new energy to lift the number of jobs in those sectors. Despite their many areas of disagreement, there a few things both candidates are pushing for. - Ending corporate inversion - or transactions where US companies move their corporate headquarters abroad to avoid US taxes - Eliminating carried interest tax - a tax that mostly benefits hedge fund investors - Opposing the Trans-Pacific Partnership (TPP) Mr Trump has not addressed how he will pay for these cuts, other than saying the changes will boost the economy and that will increase the tax base. Mrs Clinton has said most of her spending increasing will be covered by tax increases, but it is unclear if those numbers entirely match up. She will give her own economic policy speech on Thursday.
Both candidates have promised to put Americans back to work, though unemployment has hovered around a low 4.9% since the beginning of the year. Mr Trump's employment plan focuses on encouraging more businesses to open in the US. He has suggested that investing in infrastructure, cutting the trade deficit, lowering taxes and removing regulations will make it easier for companies to hire. Mr Trump has focused mostly on increasing manufacturing jobs, which have declined by around 5 million since 2000. Much of that decline has been caused by improvements in technology, however, not outsourcing. He has promised to create 25 milli on jobs over 10 years and achieve annual economic growth of 3.5%. US GDP growth reached 2.4% in 2015. Mrs Clinton's policy for jobs growth is a little more specific. She has called for increasing jobs training - in part paid for by tax revenue from wealthier Americans. She has pushed for infrastructure spending and investment in new energy to lift the number of jobs in those sectors.
905_0
Who's hiring?