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Trump economic plan will cut taxes for poor, cut exemptions, cut budget and more

Donald Trump gives a speech outlining his vision

Donald Trump gives a speech outlining his vision for tax reform at his skyscraper on Fifth Avenue on Sept. 28, 2015. Photo Credit: Getty Images / Andrew Burton

ALBANY - In delivering his long awaited economic proposal, candidate for the GOP nomination Donald Trump said he will end federal taxes for the lowest earners and the middle class, while some of the highest tax earners would see increases because he would eliminate some deductions.

"It will be simple, it will be easy, it will be fair," Trump said in Washington.

Trump's plan would eliminate the federal income tax for individuals making under $25,000 a year and end it for married couples making less than $50,000.

The corporate tax would drop to 15 percent, from 35 percent. The highest income tax would also be cut to 25 percent, from 39.6 percent, but Trump said he intends to make sure  the loopholes will be eliminated to wealthy hedge fund operators, and others avoiding any tax will be paying federal income taxes.

"I actually believe they will do better," Trump said of the very wealthy. "I believe the economy will grow, it will grow rapidly."

At least one economist agreed.

"It seems to be more radical than what the other Republicans are offering and, frankly, better," said economist Peter Morici, a professor of international business at the University of Maryland.

He emphasized, however, that Trump's plan needs to be analyzed to assure it will, as the candidate says, pay for itself in cuts and other measures to spur the economy and raise private sector and government revenue.

Morici said Trump's speech showed ways he would heat up the economy because the Democratic Obama administration's policies has discouraged small business creation and higher youth employment, keeping the nation's economic growth around 2 percent.

"Mr. Obama is satisfied with 2 percent growth," Morici said in an interview. "Two percent is good enough for milk, not growth. Donald Trump's plan is cream."

Trump gave few other details on how he would pay for the plan, other than to say he would spur the economy to grow at a hot 3 percent to 5 percent a year, maybe more. He said he will also renegotiate trade treaties such as the North American Free Trade Agreement and require countries such as South Korea and Saudi Arabia to pay for the U.S. military protection they enjoy.

"Our trade deals are not sustainable," Trump said. On the CBS news program "60 Minutes" Sunday night, Trump singled out NAFTA as a bad deal for the United States. He said he would renegotiate the treaty and others as he has done in building his successful businesses.

On Monday he also said he would charge Saudi Arabia, Korea and other countries protected by the U.S. military. He wouldn't say how much he would charge.

 "Those numbers are going to be massive," he said.

He also said he would cut waste in the federal budget by about 20 percent.

"Our country spends its money so stupidly," the billionaire developer said. "I will be able to cut, without losing anything, tremendous amounts."


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