Although we try to stay out of politics, there is no doubt at DailyForex that no matter who wins, the next President of the United States will have a dramatic effect on the U.S. as well as global economies.
So with only eight months left to election day, let’s have a look at what the presidential candidates are promising the American people and the world and take a stab at what we can expect will happen after January, 2017.
Donald Trump, the forerunner in the Republican race for the nomination, has been outspoken in his financial outlook and how he plans to ‘put America back on its feet.’ According to Trump, too many jobs have been shipped overseas and too many middle class families cannot make ends meet. True enough. As part of his solution to this problem, he proposes a tax reform which includes a simplification of the tax code and tax relief for middle class Americans by bringing up the ceiling for no taxes to $50,000 a couple.
He comes down hard on large corporations and wealthy individuals by reducing or eliminating most deductions and loopholes and phasing in a ‘reasonable cap’ on the deductibility of business interest expenses.
This plan simplifies the tax code by taking nearly 50% of current filers off the income tax rolls entirely and reducing the number of tax brackets from seven to four for everyone else. It eliminates the income tax for over 73 million households. 42 million households that currently file complex forms to determine they don’t owe any income taxes will now file a one page.
Trump believes that simplifying the tax code and cutting every American’s taxes will boost consumer spending, encourage savings and investment, and maximize economic growth.
But his biggest push will focus on spurring economic growth and encouraging more jobs. He points to politicians in Washington who have let America fall from the best corporate tax rate in the industrialized world in the 1980’s (thanks to Ronald Reagan) to the worst rate in the industrialized world and he addresses this challenge with a new business income tax rate within the personal income tax code that matches the 15% corporate tax rate for both large and small businesses.
But the proposal that has made headlines these last few months has been Trumps push to keep corporations out of China, Mexico and elsewhere and to keep them in the U.S. so as to significantly increase local employment.