The USA is close to (practical) full employment, so unless Donald Trump intends to invite a new wave of immigrant labour to the US, it is difficult to see how his policies will create vast swathes of new jobs for America in the first place. His first proposal is hardly bound to resonate with the unemployed and the under-employed across the nation as his masterstroke would appear to be a plan to drop corporation tax from 35 to 15%. This will hugely inflate the post-tax profits of big businesses, of course. He hopes that these businesses will invest their new found bucks in the American economy, boosting spending and creating new jobs; perhaps, but if it happens then the US exchequer is going to have to deal with a substantial decline in revenue until the lag is taken up by the rise in new employment and investments.
Economic analysts doing a quick back of the envelope calculation estimate that if Trump’s proposals go through (a big “if”) it would balloon the US national debt by (unspecified) trillions of Dollars over the next decade. For this reason, the measure is sure to be opposed by the Democrats but will face headwinds from economic hawks within his own Republican Party.
The plan will re-ignite the controversy over the President’s financial interests as he would benefit to the tune of millions of Dollars personally from the proposed reforms. The Democratic Party chairman, Tom Perez noted: "We must know how much Trump would personally financially benefit from his own proposal," renewing calls for the president to reveal his tax details as his predecessors had.
Other aspects of the proposals included tax breaks for childcare; doubling tax deductions and a cut in individual taxation; further tax reductions for hedge funds and businesses which pay tax at individual rates; incentives for big businesses to repatriate funds held overseas; and replacement of the current 7 tax brackets with three bands of 10, 25 and 35%.