Will Tonight's Debate Delve Into Policy, or Am I Asking Too Much?
October 19, 2016
Senior Fellow Pam Villarreal writes at NCPA's Retirement and Taxes blog:
The last two debates have been dreadfully disappointing as far as the candidates addressing any substantive economic issues. Based on studies from the NCPA's Tax Analysis Center, Clinton's and Trump's economic plans produce vastly different results. This is not surprising, of course, since these plans are predicated on different visions for the economy. Mrs. Clinton wants to promote a fair economy where the rich pay more taxes, and Mr. Trump wants an economy that can squeak out a growth rate of more than the paltry 1 to 2 percent under the current administration. In an ideal world, an effective moderator that can maintain control without cheerleading one side or the other might ask these questions of the candidates.
For Hillary Clinton:
- You have repeatedly promised to "unleash the power of the private sector." This implies that under the current administration the private sector is "leashed" in a way that it cannot operate freely and effectively. What leashes that have been imposed by the current administration do you plan on removing from the private sector?
- In the same breath of touting the importance of the private sector, you also wish to hike taxes on capital investments to a top marginal rate of 47.4 percent for wealthy investors. Since business growth relies on capital, how do you reconcile your pro-private sector stump speech with your actual tax plan?
- You have indicated your desire to expand Social Security, but an NCPA analysis of your tax plan shows that payroll tax revenues will fall over the next 10 years because fewer people will be working. How do you plan on paying for your Social Security expansion?
- You have indicated your wish for more stimulus spending -- albeit on a smaller scale than Obama\'s $830 billion stimulus package -- to build and repair infrastructure and grow the economy. This sounds much like Obama\'s stimulus claim, yet much of the previous money was wasted on things such as anti-capitalist puppet shows, a turtle tunnel in Florida and subsidizing several green energy companies that eventually filed for bankruptcy. How do you plan on spending your proposed stimulus and what do you say to those who have found the multiplier effect to be vastly overstated?
For Donald Trump:
- Like Mrs. Clinton, you believe that carried interest should be taxed as ordinary income, not at the lower capital gains rate. This means that without lower personal income tax rates, carried interest could be taxed at a rate as high as 43.4%. How will that encourage investment?
- You have spoken out often against free trade, and have described the North American Free Trade Agreement (NAFTA) as a "disaster." However, U.S. jobs and exports have grown dramatically since its implementation. What parts of NAFTA do you consider to be a disaster?
- You have also called for an import tax of 20 percent, 35 percent of even 40 percent, depending on the source. Last year, your own economic advisor Stephen Moore co-authored a column in which he called your 35 percent tariff proposal "worrisome in the extreme." Which of you will prevail on this issue should you become president?
- Finally, an NCPA analysis of your tax plan shows that it would spur economic growth, investment and personal income growth over 10 years far beyond CBO baseline estimates, but would increase the deficit by $7 trillion over 10 years compared to CBO estimates. Do you plan on cutting federal spending? If so, in what areas?
Of course, I am betting that this Q&A session is not going to happen on Wednesday night. But there is always hope.
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