The United States of America, being the third most populated country on the globe, has a population as diverse and unique as the world itself. This diversity creates a potential political minefield, especially when aspiring to lead the nation. According to Pew Research, the following are some of the criteria, and their impact on the possibility of success of a presidential candidate.
Regarding his economic policies, there are mixed feelings. He has based his economic reform on three issues, namely, tax cuts, immigration reform, and trade reform.
Trump’s tax plan intends to reduce the current income tax roll by nearly 50 percent (over seventy three million households), and reduce the number of tax brackets from seven to only four. It also aims to counteract loopholes used by the very rich.
On the business front, Trump’s plan will cut the corporate tax rate to 15 percent, making it one of the best in the world. This rate will apply to all businesses across the board, enabling freelancers, sole proprietors, unincorporated small businesses, and pass-through entities to take advantage, unlike the current system, in which they are taxed at the personal income rates.
The revenue lost to government due to these adjustments will be countered in a number of ways. By counteracting deductions and loopholes used by the extremely affluent, small businesses will remain unharmed, while the rich will, for example, lose exemptions on life insurance interest.
$2.5 trillion of United States-owned corporate cash is currently offshore. This cash can now be brought back into the country, on payment of a once-off repatriation fee, to be taxed at the new, more attractive rate. By doing this, the harboring of money offshore to avoid tax will become less attractive. Corporations will also be prevented from deferring taxes on income earned overseas, taking the foreign tax credit into account, thereby avoiding double taxation.
The next key in Trump’s economic plan is the deportation of all illegal immigrants. He blames them for taking American jobs, and keeping salaries down, preventing many working class Americans from earning a middle class wage. Research, however, indicates the effect of immigrants on wages to be negligible.
Regardless of the impact, the proposal would be extremely expensive, with the American Action Forum estimating a cost of between $400 billion and $600 billion for the whole operation, in addition, the economy on a whole will also suffer, as the GDP would be lowered by $1.2 trillion. Mexican officials have scoffed at the suggestion of having to pay for the 2,000 mile wall being proposed between Mexico and the United States, as the curt, rather crude response of former Mexican President Vicente Fox indicated.
Trump’s strongest card is his proposed trade reform, specifically regarding China. He was quoted as saying the following.
“What they’ve done to us is the greatest single theft in the history of the world. They’ve taken our jobs; they’ve taken our money. They’ve taken everything.”
According to Trump, China has stolen millions of jobs from Americans by keeping its currency low, and its disregard for sound labour and environmental practices. Trump has promised to change this. This standpoint has resulted in strong support for his bid, as recent studies reflect that up to three million factory jobs have been lost to China since the year 2000, with the trade deficit increasing more than tenfold.
All things considered, Trump’s proposals are sound at face value, but are they practically viable? That remains to be seen, should Donald Trump carry the title of president.
(2016 Getty Images)