Major tax cuts proposed.
With Donald Trump’s poll numbers reportedly falling, Trump has a lot riding on his economic speech today. Scheduled to deliver the address before the Detroit Economic Club, Donald Trump needs to widen his appeal to business-minded voters and fiscal conservatives. These constituencies are traditional Republican voting blocks –and one in which Trump has underperformed.
Trump is expected to make three major tax proposals, according to Bloomberg:
1. Repealing the estate tax
The estate tax — commonly called the “death tax” in a clever bit of branding by Republican strategists — has been a favorite conservative talking point for decades. Right now, a 40% tax is levied on estates of more than $5.45 million for one person and $10.9 million for couples. The conservative point of view, though, is that the estate has already paid taxes via the income tax and other mechanisms, and that it is unfair to tax the money again simply because the taxpayer dies.
2. Eliminating taxes on childcare
Trump will also propose making childcare costs completely tax deductible. This is an issue where he can directly compare himself with Clinton, who has proposed a cap of 10% taxes on the cost of childcare. Eliminating this tax could appeal to working parents and single mothers, groups that may normally be less inclined to vote for Trump.
3. Capping corporate taxes at 15%
Putting a hard cap of 15% on corporate tax rates has deep appeal to corporate and business leaders, who argue that lower tax rates allow them to pass earnings on to employees and investors. Trump can also use this proposal as a sign that he has a plan to cut down on corporate inversions — a method of avoiding taxes by moving company’s headquarters (and jobs) overseas. By lowering the corporate tax rate, Trump could work to keep American businesses from taking headquarters overseas.