Sponsored
×
Trump's economic platform is a guise for the rich - The Pitt News

The Pitt News

Trump’s economic platform is a guise for the rich

By Saket Rajprohat | For The Pitt News

Hang on for a minute...we're trying to find some more stories you might like.


Email This Story






“Trumponomics” sounds like a helping hand for the little guy but is actually a pedestal for the wealthy.

Republican presidential candidate Donald Trump announced his economic plan during a speech at the Economic Club of New York last Thursday, calling for 4 percent economic growth if he becomes president. The candidate plans to increase the amount of goods and services produced in the United States by 4 percent, promising an increase in employment, growth of the middle-class and “great paychecks for millions of people.”

Now that Trump has finally released his economic platform — rather than making vague statements about how great it will be — we can set aside conversations about his scandals, health issues and hairstyles.

While Trump’s proposals may seem appealing to those who want lower taxes, his policies would harm our economy — hurting middle-class Americans the most by cutting funding for public services. It becomes very easy to overlook the actual policy goals in Trump’s plan when he compares his economic revival to events including winning both world wars and landing a man on the moon. But we need to examine the numbers, because they’re ludicrous.

Economic growth of 4 percent is unrealistic at best considering that our economy has ranged in growth from -2.78 percent in 2009 to 2.53 percent in 2015. The only time we were anywhere close to 4 percent growth was in 2004 when the economy peaked at 3.79 percent before dropping off dramatically to -0.292 percent before President Barack Obama took office. In fact, the last time economic growth occurred to the extent Trump is proposing was during Bill Clinton’s administration. Except instead of lowering taxes, Clinton’s administration increased investment in the private sector and upped taxes to pay off the $276 billion national debt — by 2001, the surplus had dropped to $128 billion.

Not exactly detailed in his plans on how his policies would reach 4 percent, Trump highlighted $4.4 trillion in tax cuts in his speech and on his website.

Additionally, he announced he would not be making cuts to programs like Medicare, social security and our military budget, which together stand at a total of almost $3 trillion in federal spending as of 2015, according to the National Priorities Project.

Instead, he plans to make cuts to programs that simply cannot handle cuts, some of which include veterans’ benefits, education, food and agriculture and transportation, even though they receive the least amount of funding. He also promised to create 25 million jobs in the next 10 years, but was unable to clarify how that would happen and directed those who questioned the plan to visit the website and check the math.

As optimistic as his goal may seem, Trump’s tax reform plan proves his economic plan is not feasible. Initially, Trump expects to implement a new tax bracket that simplifies the current seven prong tax bracket into three. Right away, this would dramatically decrease the amount of taxes people paid no matter what tax bracket they fall in — the most significant cut of which would be for the rich, which in Trump’s tax plan is the top 33 percent of the income bracket. Above this, he also intends to increase the amount of standard deductions available to the top 33 percent, allowing for increased tax avoidance.

It is simply impossible to provide tax cuts for everyone without having to cut spending on our biggest programs, mainly because of how much revenue the government would lose. Unspoken by Trump, his plan would reduce federal tax revenues by about $12 trillion in the next decade. That is not counting the increase in deductions that corporations are bound to take part in order to increase their after-tax income. A reduction of this magnitude is not sustainable with a federal government that spends $3.8 trillion annually.

As a result, Trump’s ability to say that his plan will cause tax relief on the middle-class is partially true. But the wealthiest Americans will reap more benefits from this plan than the middle-class. Above that, his plan does not account for anything that could happen as the result of his major decrease in tax revenue.

The spending he intends to cut will only be about 21 percent of the federal budget, or about $800 billion, assuming he cuts every single program that is not Medicare, social security and military. This means he would likely have to cut into programs that middle-class families depend on.

Tax relief may seem like a great way to push for consumer spending, for corporations to invest in hiring more workers and to allow our economy to grow, but that is simply not realistic.

Trickle-down economics — deregulating the market, cutting taxes substantially for the rich and just hoping the wealthiest in America will reinvest in the economy — has never worked. We can not expect and depend on the richest of our country to control the economy how they see fit — they do not stand as an institution for the betterment of society.

Trump’s economic plan is shortsighted, at best. It may reduce the amount of taxes all across the nation, but it has no ability to make up for lost revenue and simply cannot avoid the negative effects it will have on the middle-class. And that is no way to make America great.

Write to Saket Rajprohat at Smr122@pitt.edu.

 

Leave a comment.

The University of Pittsburgh's Daily Student Newspaper
Trump’s economic platform is a guise for the rich