The economy is central to Donald Trump’s promise to “Make America Grow Again.” That was explicit in his speech to the Detroit Economic Club on Monday. What was implicit was his evident intention to make himself credible again.
Trump cut a much more serious figure than he did last week, when he engaged needlessly in personal attacks and old controversies. In Detroit, more than a dozen interruptions from protesters gave him the opportunity to demonstrate a change of tactics. And he made the best of them by ignoring them and delivering a speech rich in policy, much of it sound.
Trump announced his plan to enact what would be the most significant tax reform since the Reagan presidency. He proposes to reduce the number of brackets from seven to three, with the highest rate at 33 percent (down from nearly 40 percent). All three of his suggested rates are higher than he proposed during the primaries, and are more in line with those suggested by House Republicans. They signaled a willingness to work with the congressional GOP to enact reform.
He also calls for a 15 percent business tax rate (down from the current 35 percent, which is one of the world’s highest) and eliminating the estate, or death tax.
Trump further proposes allowing companies to expense new investments immediately instead of forcing them to live with the current complicated system that obliges them to estimate deprecation over many years. So far, so good.
His plan would also, however, penalize companies that move abroad to take advantage of lower tax rates. This is counterproductive and would not bring Trump any thanks from the millions of shareholders who expect the people running their companies to maximize shareholder value rather than staying in America because of a regime of involuntary economic nationalism.
Trump’s plan would also allow families to deduct the average cost of child-care spending, a reform that the Left has long advocated but which also fits a pro-family party. Taxpayers shouldn’t be put at an economic disadvantage just because they have children, who, after all, are future workers and contributors to federal coffers.
On red tape, Trump calls for a moratorium on new financial and environmental regulations. And on energy he pledges to put the Keystone XL pipeline project back on the table, rescind the Climate Action Plan and tear up the Paris climate treaty, among other measures, all good moves.
Trump spent plenty of time attacking Hillary Clinton, tying her to President Obama’s lamentable economic policies, especially those on regulation and energy, and insisting she’d make matters worse. She has pledged to put coal companies out of business and the jobs they provide on the recycling heap of history. Trump promised to put them back to work by reforming existing policy and opening “a new chapter in American prosperity.”
He described Clinton as “the candidate of the past” and his movement as “the campaign of the future.” But Trump and Clinton embrace retrograde protectionist trade policies. Trump vows to use executive powers to renegotiate or abandon trade agreements, including NAFTA and the Trans-Pacific Partnership, which Congress has not yet ratified. Free trade is a huge engine of general prosperity even though, in doing so, it destroys jobs in some sectors in the process of redeploying capital to more efficient areas of production. A forward-looking trade policy which refused to pander to protectionist fears, would acknowledge that many manufacturing jobs aren’t coming back, and would focus instead on transitioning workers to new or thriving industries.
Trump succeeded in doing what aides and Republicans generally have been begging him to do for weeks. He attacked Clinton’s policies and proposed some serious ones of his own. At the end of his speech, the candidate said he would roll out more economic policy in coming weeks. He is at his most effective when discussing simplified taxes and regulation, and comparing them to Clinton’s promises, both explicit and implicit, to heap more of both on to a nation already groaning under the weight of those added by Obama.
Trump needs to mine this seam every day until Election Day, Nov. 8.
