Fact-Checking Donald Trump’s Speech on the Economy

August 8, 2016, 8:30 PM UTC
Republican U.S. presidential nominee Donald Trump speaks to the Detroit Economic Club at the Cobo Center in Detroit, Michigan
Republican U.S. presidential nominee Donald Trump speaks to the Detroit Economic Club at the Cobo Center in Detroit, Michigan August 8, 2016. REUTERS/Eric Thayer - RTSLVFX
Eric Thayer — Reuters

Donald Trump delivered a major economic policy address on Monday, proposing, among other things, big corporate tax cuts and elimination of the estate tax. In his roughly one-hour speech, Republican presidential nominee also made a lot of claims about the state of the economy and the economic record of his Democratic opponent, Hillary Clinton.

Here we fact check five key assertions Trump made.

1. On who is responsible for Detroit’s economic problems

Trump’s quote: “This is a city controlled by Democratic politicians at every level, and unless we change policies, we will not change results.”

Fact: If Trump was speaking only about the city government of Detroit, he has a point. Every mayor of the city has been a Democrat since 1962. The executive of Wayne County is a Democrat too. But Trump said “on every level,” and there is at least one level where Republicans have some say over Detroit — the Governor of Michigan. Rick Snyder, is a Republican. Both Houses of the Michigan state government are also controlled by the GOP. Another problem with this statement, though, is the omission of Clinton’s support for the auto bailout of 2008, which saved an estimated 1.3 million jobs. While the move was initiated by George W. Bush and seen to completion by President Obama, Clinton was always a supporter of the move.

2. On the number of people on food stamps under Obama

Trump’s quote: “Nearly 12 million have been added to the food stamp rolls since President Obama took office.”

Fact: Trump is correct that millions have started receiving food stamps since President Obama was elected, but it has been shrinking. According to the non-partisan site Factcheck.org, the number was actually around 13.4 million as of the start of this year. About 45 million people on the rolls — which is around 42% higher than when Obama took office in the midst of the financial crisis. The total number of Americans receiving food stamps, however, is down by 5% since it hit a record high in 2012.

3. On Hillary Clinton’s support for “job-killing” trade policies:

Trump’s quote: “Hillary Clinton has supported the trade deals stripping [Detroit], and this country, of its jobs and wealth. She supported Bill Clinton’s NAFTA, she supported China’s entrance into the World Trade Organization, she supported the job-killing trade deal with South Korea, and she supports the Trans-Pacific Partnership.”

Fact: This one is a bit of a mixed bag. Clinton has generally been supportive of free trade deals like the North American Free Trade Agreement, which Bill Clinton initiated. But Hillary Clinton’s position on free trade became an issue during the primary debates with Bernie Sanders. She now says she no longer supports the Trans Pacific Partnership, though Terry McAuliffe, the governor of Virginian and a longtime Clinton insider, has said that she could support it with revisions once in office. Clinton’s campaign has refuted this notion. As for whether trade deals are job killers, unions and the left have generally taken this stance, noting after NAFTA, companies did move jobs out of the US. But conservatives and free trade proponents have argued that trade deals help Americans by lowering prices.

4. On small business being held back by too much regulation:

Trump’s quote: “You can not ever start a small business under the tremendous regulatory burden that you have in today in our country. We’re going to end it. I am going to cut regulations massively massively.”

Fact: The number of new small businesses being created has slowed, but it’s not as dire as Trump suggests. From 2011 to 2013, the most recent years available, the Census Bureau found that the number of businesses with =fewer than four employees has increased by 43,232 to 3.58 million, according to AP, It’s not clear regulations deserve the most blame either — as many other factors, including student loan debt and the housing bust, have been cited.

5. On how much of a burden paying taxes is to the average American:

Trump’s quote: “Tax simplification will be a major feature of the plan. Our current tax code is so burdensome and complex that we waste 9 billion hours a year in tax code compliance.”

Fact: Trump is echoing a claim others have made, though he seems to be stretching the number more than usual. In 2013, Republican Congressman Dave Camp from Michigan said Americans spend 6 billion hours a year filing out tax forms. The IRS has estimated that it takes the average tax filer 13 hours to complete their tax form. And the IRS estimates that there will be 254 million income tax forms filed in 2018. That translates to roughly 3.3 billion hours. If Trump’s 9 billion was the correct number, that would mean the average tax filer is spending 35.4 hours on their tax form.

But roughly 25 million of those 254 million tax forms are from the same filers. The total number includes estimated tax forms as well as the forms filed by April 15. That 13 hours the IRS cites is an average for all filers, and it includes tax planning as well as actually filling out the forms. Individuals, who make up 62% of all filers, only spend 8 hours on filing out their taxes, according to the IRS.

Businesses do spend about 24 hours to fill out their tax forms. But all business and partnerships only account for about 41.5 million tax filers or just 6.7%. Based on that breakdown, the tax compliance hours drops to just over 2.2 billion hours. What’s more, rough 55% of those hours are spent by companies. The number of hours that all individuals in the U.S. spend filing out their taxes is slightly less than 1 billion hours. A lot, to be sure, but far less than Trump’s statement.

Additional reporting by Stephen Gandel.

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