Trump's Tax Plans: Good, Bad, Ugly?
Plus: Trump endorses Larry Hogan, violent crime decreases, and more...
Donald Trump wants to cut taxes if he gets a second term. On Thursday, the former president told a group of influential business leaders—Apple's Tim Cook and JPMorgan Chase's Jamie Dimon among them—that he supports reducing the corporate income tax from 21 percent to 20 percent. He prefers a "round number," according to The New York Times.
While that may not seem like a massive difference, it is quite a contrast with President Joe Biden's tax policy. The 2017 tax reform bill that Trump signed permanently cut the corporate income tax rate from 35 percent to 21 percent.* Biden has proposed a corporate tax rate of 28 percent.
Trump's relationship with business leaders has not always been positive. Many of the gathered CEOs—who met with Trump during a meeting of the Business Roundtable in Washington, D.C., on Thursday—had denounced him in the wake of the Capitol riot. But according to the Times, Trump largely succeeded in reassuring them that he would pursue pro-growth policies.
And while Trump savaged illegal immigration and complained that millions of illegal border crossers would wreck the country, he did express support for high-skilled legal immigration, saying it was a profound mistake to send such people back to their home countries after they are educated in the U.S. These remarks also seemed to please the businessmen. (It should be noted, of course, that low-skilled immigrants are no less vital to the American economy.)
Now for the bad: During a meeting with GOP lawmakers, Trump also floated replacing the income tax with an "all tariff policy"—that is, with taxes on imports. Tariffs that high would be disastrous. According to the National Taxpayers Union (NTU), it would theoretically take a tariff rate of 71 percent to replace the revenue from the income tax. Such a punitively high trade barrier would wreak havoc on the economy—and would dramatically reduce imports, meaning the actual revenue raised would not be sufficient.
The "revenue hit would be worsened by the massive economic disruption a 71 percent tariff would inflict on the economy, the resulting lost exports and global trade war, and the indirect impact of transitioning from a progressive individual income tax system to a regressive import tax system," writes NTU's Bryan Riley.
Other economists have reached similar conclusions.
Notes:
1) US imports of goods/services in 2023: $3.8T
2) Federal spending in 2023: $6.1T
3) Imports wld decline in response to high tariffs (likely far below 100%)
4) Tariffs on services wld be difficult, & evasion would be rampant
5) Trump won't touch entitlementsTough math! https://t.co/N4eTssIGoH
— Scott Lincicome (@scottlincicome) June 13, 2024
Unfortunately, both major presidential candidates are enamored with tariffs. The Biden administration recently announced a 50 percent tariff on Chinese semiconductors, a 50 percent tariff on batteries for electric vehicles, and a 100 percent tariff on electric vehicles built in China. "When voters go to the polls this November, they will face a choice between two men who have used their presidential powers to hike import taxes on American businesses and consumers," notes Reason's Eric Boehm. Some choice.
Speaking of Trump and choices, the former president has endorsed Larry Hogan. Hogan, the former governor of Maryland, is running for that state's Senate seat against Democrat Angela Alsobrooks. If he wins, he would flip the seat—and potentially the U.S. Senate, giving Republicans control of the chamber.
Hogan is a moderate Republican who has frequently criticized Trump. He did not support Trump in 2016 or 2020. With respect to the former president's prosecution in New York, Hogan called on the American people to "respect the verdict."
All of this made Hogan an unlikely endorsement for Trump. Republicans want the seat, but Trump has not been especially kind to fellow party members who decline to show him support. Maybe that's changing.
"I'm about the party, and I'm about the country," said Trump. "And I would like to see him win."
Violent crime declined precipitously in the past year. According to the latest report from the FBI, violent crime and property crime are down significantly for the first several months of 2024.
"A comparison of data from agencies that voluntarily submitted at least two or more common months of data for January through March 2023 and 2024 indicates reported violent crime decreased by 15.2 percent," says the report. "Murder decreased by 26.4 percent, rape decreased by 25.7 percent, robbery decreased by 17.8 percent, and aggravated assault decreased by 12.5 percent. Reported property crime also decreased by 15.1 percent." These numbers are preliminary and are likely to change. But as Reason's C.J. Ciaramella recently noted, the picture they paint "tracks with other early data from 2024"; he suggests that "the general trend would likely hold" even if these figures turn out to be exaggerated.
This is good news, of course, and it shows that violence—which spiked during the pandemic—is falling. Experts caution, however, that the summer months are often the most violent.
Crime is also declining in the nation's capital, which saw a massive spike in homicides last year. For an explanation of what went wrong, read Joe Bishop-Henchman's story in the July 2024 issue of Reason.
Scenes from Washington, D.C.
Climate activists stormed the field during this week's annual congressional baseball game. They were swiftly arrested.
UPDATE: Eight of us have been arrested for shutting down the Congressional Baseball Game.
They are behind bars right now.
Make no mistake: It's the Members of Congress who should be locked up. pic.twitter.com/tNoB4jh0xp
— Climate Defiance (@ClimateDefiance) June 13, 2024
QUICK HITS
- In other Trump news, the former president made some bizarre comments about former House Speaker Nancy Pelosi.
- Trump also made an appearance with Logan Paul.
- Sen. John Fetterman (D–Penn.) and his wife were recently in a car accident—and it was apparently his fault.
Sen. John Fetterman was at fault in car accident and seen going 'high rate of speed,' police say https://t.co/CMZf0WEAWX
— The Associated Press (@AP) June 13, 2024
- Robert F. Kennedy Jr.'s presidential campaign has a filed a complaint with the Federal Election Commission alleging that excluding him from the CNN debate violates election law. We discussed this on Rising:
- "Far-right" parties are winning elections in Europe.
- Russia plans to bring espionage charges against Wall Street Journal reporter Evan Gershkovich.
- The Supreme Court rejected an effort to restrict access to the abortion pill.*
* CORRECTIONS: These sentences have been changed to more accurately describe the 2017 tax cuts and the Supreme Court's abortion-pill decision.
