Donald Trump on Monday sought to cast Hillary Clinton's economic program as an ineffective relic, and to reset his own presidential campaign after a string of missteps.
“We now begin a great national conversation about economic renewal for America,” Mr. Trump said in a speech to the Detroit Economic Club, urging a return to his “America first” governing vision.
The nominee proposed a temporary moratorium on new agency regulations.
Mr. Trump announced major changes to his plan to slash individual income tax rates, taking the top rate to 33%. While that's higher than the 25% top rate Mr. Trump initially proposed, it still represents a cut from the current top rate of 39.6%.
Mr. Trump initially proposed three tax rates — down from the current seven — of 10%, 20% and 25%. His new rates — 12%, 25% and 33% — mirror those proposed by House Republicans under Speaker Paul Ryan, R-Wis., in June. Mr. Trump pledged to work with Mr. Ryan and others on the tax plan, but added “we will develop our own set of policies and assumptions” and will disagree in some areas.
Mr. Trump's tax changes, combined with regulatory overhauls and plans to boost the domestic energy industry, will push U.S. economic growth to 4% annually, said economist Stephen Moore, who's advising Mr. Trump's campaign. Growth at that rate would help cut the revenue cost of Mr. Trump's tax plan — which some analysts had pegged at roughly $10 trillion over 10 years — to less than $2 trillion or so over the decade, Mr. Moore said.
For businesses, Mr. Trump's tax plan would slash the rate on corporate and business income to 15%, down from a current top corporate tax rate of 35%. Members of partnerships, limited liability companies and other so-called “pass-throughs,” who currently pay regular individual tax rates on their business income, would see a significant cut under the plan.
Mr. Trump also would end corporations' ability to defer paying taxes on their overseas income, although he'd subject that income to a still-lower tax rate of 10%. That lower rate would give companies incentive to return more than $2 trillion in foreign earnings to the U.S., Mr. Trump said, and would “end job-killing corporate inversions” by removing an incentive for them.
Mr. Trump cited his intent to eliminate some “special-interest loopholes” that have benefited Wall Street investors. He mentioned his call for ending the special tax treatment of carried interest, the portion of investment gains paid to fund managers.
“Donald Trump's call for the elimination of carried interest demonstrates an unfortunate misunderstanding of the critical role it has played in the growth of the U.S. entrepreneurial ecosystem,” Bobby Franklin, president and CEO of National Venture Capital Association, a Washington-based trade group, said in a statement. “Despite the populist uproar, carried interest has been an important feature of the tax code that properly aligns the long-term interests of investors and entrepreneurs to build great companies together, and is only realized after our country receives the benefit of greater economic activity.
Some analysts have said that Mr. Trump's overall plan might mean lower taxes for members of partnerships who receive carried interest. Carried interest is now taxed as capital gains, meaning the income qualifies for a tax rate as low as 23.8%. Under Mr. Trump's plan to cut business taxes, though, members of partnerships who get carried interest might be taxed at a 15% rate. Many investment firms are organized as partnerships.
After Mr. Trump said Aug. 2 he would double Ms. Clinton's infrastructure spending plan in a major government expansion, aides said he will speak later this summer about his plan for the nation's roadways.
Mr. Trump's plans align in many ways with the election-year policy proposals rolled out by Mr. Ryan and House Republicans, including his call for undoing the 2010 Dodd-Frank Act and limiting any regulations that burden businesses. The House plan wouldn't allow any new financial regulations to take effect unless the House votes.
Mr. Trump, however, has proposed deeper corporate tax rate reductions. Under the House plan, corporate tax rates would be lowered to 20% from 35%.
P&I reporter Arleen Jacobius contributed to this story.
