Mike & Co. —
The second Presidential debate last night focused mostly on personal qualifications, the histories of each candidate, and foreign policy. But economic issues policy issues, especially tax policy, still came in for their fair share of debate, with heaping portions of demagoguery. You can find an abridged version of the 2nd debate that covers the below issues HERE.
In keeping with the norm, the majority of Trump’s claims were either poorly substantiated, misinformed or just outright wrong. Below is a summary of the economic topics covered in the debate, with a focus on new and changed policy positions and a fact check of Trump’s interpretations of the record.
Changes and Clarifications in Policy
While the debate offered relatively little in the way of serious economic policy talk, especially from Trump, questions regarding tax policy and energy policy, along with strong moderators who forced Trump to actually answer them, yielded some new insights into both candidates’ economic policy goals.
- Tax Policy
When asked about how his tax plan would force billionaires like himself to pay their fair share, Trump could only cite his plan to remove the carried interest loophole, along with vague and inaccurate statements about bringing “huge” tax relief to the Middle Class.
Trump for the first time admitted that he had not paid Federal income taxes based on the figures he reported in 1995; however, he refused to specify for how long and claimed he paid millions in other taxes over the last 20 years.
- Energy Policy
This was the first time Trump directly attacked the EPA, accusing them of killing the energy sector. He has previously attacked regulations on the energy sector, this was his first major attack on the EPA itself. This hints at an intention to either dismantle or weaken the Agency as part of a plan to de-regulate the energy sector.
Trump cited his intention to use the energy sector to “pay off our national debt.” This is the first time Trump has outright said that he will rely on the energy sector to fund the government and pay off the debt. This suggests that Trump’s policy will seek to turn the US into a petrol state, like Russia or Saudi Arabia, whose economy is at the whim of the international energy market.
Many of Trump’s statements, especially on economics, were simply factually inaccurate. Trump was wrong not just about the current economy and the HRC economic plan, but about basic details of his own economic plan.
- Recovery and the Trade Deficit
Trump described the current economic situation as “the worst since 1929” and criticized economic growth at only 1 percent. While growth for this year has only average 1.4 percent by the second quarter, growth last year was over 2 percent growth.
This is not the worst growth the United States has seen, even post World War II, as there have been recessions in every decade where the economy retracted.
Trump also claimed, as he has throughout the election, that the current Trade deficit is $800 billion. This is wrong, the trade deficit as of last year was $500 billion, almost half of Trump’s figure.
- Tax Policy
Trump claimed that his tax plan will reduce business taxes to 15 percent. This is untrue. Among the multiple Trump tax plans in circulation, none reduce all corporate tax rates to 15 percent. The plans provide different rates for different types of income, and many types of corporations, including S-corporations are not included at all. Even in his most generous plans, only corporations pay a 15 percent rate across the board, and other business structures pay higher rates based on the type of income generated.
Trump claimed that taxes in the United States are the highest in the world, which is also untrue. While the United States currently has some of the highest corporate taxes in the developed world at 35 percent, taxes in the United States as a proportion of GDP is at 26. This is far below the OECD average of 34.4 percent, and in the bottom third of the most developed countries.
Trump also claimed that the HRC plan will raise taxes on the middle class and his will reduce them. This is untrue according to multiple Tax policy research groups. According to the Tax Policy Center, the HRC tax plan will save most Americans money, consistent with her pledge of not raising taxes on anyone making under $250,000 a year and this is before factoring in other intended tax cuts for low and middle income families. However, the Trump tax plan favors the rich, and while potentially raising the taxes on 25 million Americans and lowering the taxes on the rich by almost 10 percent according to the Tax Policy Center.
Trump asserted that Clinton was not in favor of removing the carried interest loophole, which is untrue. Clinton has said she is in favor of removing the carried interest provision.