VIDEO: Tax Plan
Tuesday 23 August 2016 / Hour 1, Block A:Veronique de Rugy, Mercatus Center, in re: Has the market already factored in the two tax plans? Not clear; maybe not. Mrs Clinton’s plan has an exit tax for corporations moving money elsewhere; it doubles down on the horrible worldwide tax system, rather totalitarian. Don’t we want the money to return it home? Yes: and to do so, have a tax system that is not punishing. Give Trump credit: lower the corp rates so the incentive to leave goes away; also, give them an easy repatriation rate (I think of it as a toll): there $2 trillion offshore; and then lower corp . . . The Detroit economic speech by Donald Trump.
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Hillary Clinton presented her economic platform today in Michigan, where she discussed her tax plan for America. The Mercatus Center Senior Research Fellow Veronique de Rugy said the following in response to Clinton's plan:
Hillary Clinton’s plan is nothing new. She wants to tax the rich but fails to acknowledge the damages that her policies could trigger. I am less concerned about rich people working less today as a result of higher taxes than I am about younger Americans steering clear of becoming highly-skilled professionals because it’s just not worth the effort. The economic literature also tells us that high taxes will influence how long people stay in the labor force, especially when you match the tax increases with generous welfare benefits. This is not a recipe for more growth.
In a column for Reason, de Rugy said, regarding Donald Trump's tax plan:
It [Trump's plan] would broaden the base by getting rid of loopholes (such as carried interests) and lowering the tax rates. He promised to work with Congress to move from a 7 bracket tax system to one with the three rates of 33 percent, 25 percent, and 12 percent. We all could use some tax simplification in our lives, as Americans waste massive amounts of time and money complying with the current tax code.
Unfortunately, he would also make the tax code more complex with an unlimited tax deduction for child-care costs. This awful, populist policy would not only be expensive without any chance of growing the economy, but it would also be unfair to low-income parents who don't benefit from tax deductions, to stay-at-home mothers and, of course, to childless Americans.
The best part of the Trump tax plan is probably his proposed reform of the corporate income tax system, which would cut the rate from 35 percent to 15 percent. He would also try to induce American companies to bring income now parked abroad to avoid being double-taxed by offering a 10 percent tax rate on repatriated income. Click here to read the article.