Trump and Clinton economic plans fall short of helping middle class: analysts

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WASHINGTON (Talk Media News) –Republican presidential nominee Donald Trump and Democratic rival Hillary Clinton’s recently proposed economic plans are unlikely to significantly help America’s middle-class, according to analysts interviewed by TMN.

Both candidates support middle class tax cuts but Trump said he would reduce marginal tax rates for businesses to a 15 percent maximum to encourage employers to hire more workers. Clinton said she would help facilitate employment prospects by incentivizing public-private sector partnerships.

Sylvia Maxfield, who is the Dean of Providence College’s School of Business, said neither candidate’s tax policy is likely to enhance middle-class prospects.

“I don’t understand how Trump’s three tax brackets help the middle class,” Maxfield said. “Clinton’s policies might indirectly help those in the middle but her policies direct impact is minimal – it comes through childcare and education subsidies. Public-private partnership incentives magnify the return on infrastructure dollars spent by the government.”

Scott Paul, who is president of the Alliance for American Manufacturing, also expressed doubt as to the overall benefits offered to middle-class taxpayers by each candidate’s plan.

“To the extent we have details about both the Clinton and the Trump plans… Trump has proposed this broad-based rate reduction to 15 percent. The challenge-and this has been what one of the hang-ups in Congress has been: how do you offset the costs of that because under our budget rules you have to generate a lot of revenue from other places? So do you eliminate some types of deductions? Do you raise the money from somewhere else or do you increase the debt? And so I think that’s an open question.”

“When you look at the Clinton plan its much more targeted to manufacturing in particular and there are carrots and sticks,” Paul said. “There are carrots for bringing jobs back to the United States [and] for investing in manufacturing equipment or apprenticeships in the United States. There are penalties for companies that would be shipping jobs abroad or that generate a lot of foreign income.”

Scott said although there are significant differences between the two proposals the underlying challenge of both is offsetting the cost of implementation and providing requisite tax relief to businesses most in need.

Trump said he would oppose purportedly exploitative trade agreements such as the pending Trans-Pacific Partnership agreement and would not hesitate to impose tariffs on a large number of foreign products.

Clinton previously supported the Trans-Pacific Partnership trade agreement but said as president she would oppose implementation of the pending legislation. Clinton also said she would consider imposing tariffs in the event American products are being grossly undervalued.

Maxfield said isolationist trade proposals pursuant to both candidates opposition to the Trans-Pacific Partnership trade agreement are unlikely to benefit the middle class. She also said that trade tariffs are of minimal utility so far as protecting American products from being undervalued:

“Diminishing U.S. global engagement alone won’t help the U.S. middle class…Tariffs can help boost new industries, especially for newly centralizing economies like Latin America in the 1930s, but there is no economic theory or data to support the claim that it will help the U.S.”

Paul favors free trade agreements but contended that numerous studies have shown that approving the Trans-Pacific Partnership agreement could possibly further decimate America’s manufacturing base.

“All of the economic forecasts that have been done; from the World Bank to the International Trade Commission… estimate that the TPP would in fact cost American manufacturing jobs,” Paul said. “Some of the studies would stipulate that there may be some modest positive economic benefits overall to the economy from the TPP, but as it pertains to manufacturing; they think that the sector would get hit.”

Paul also said that politicians tend to overestimate the potential of impact of trade agreements in light of increased globalization effects.

“The potential impacts and the potential benefits of trade agreements are overstated compared to the size of our economy,” Paul said. “And what I think unfortunately we’ve seen lately is that the United States has found that the jobs that we’ve lost as a result of some of this trade competition, in particular to China, have gone higher up the value chain than we thought they might so they’re actually good paying jobs and they’ve been harder to get back or to reclaim that kind of income.”

Clinton said increasing investment in infrastructure projects is key to facilitating economic growth and reducing unemployment. She also laid out an ambitious plan that she described as the biggest investment in new, good-paying jobs since World War II.

“We will put Americans to work building and modernizing our roads, our bridges, our tunnels, our railways, our ports, our airports,” Clinton told supporters in Detroit.

Trump also said infrastructure improvements would be included in his economic plan but gave a more generic explanation:

“We can use this new wealth to rebuild our military and our infrastructure,” Trump said “As part of this new future, we will also be rolling out proposals to increase choice and reduce cost in childcare, offering much-needed relief to American families.”

Maxfield said neither candidates’ infrastructure proposals are sufficient.

“Investment needs to be huge and the Clinton plan is relatively precise but not huge,” Maxfield said. “Trump says he wants a more significant amount but is short on details.”

Paul again expressed doubt as to how much the candidate’s proposals would directly impact the economy due to the overriding power of the free market. But Paul said increasing infrastructure investment could potentially help the economy.

“Investing in our infrastructure and construction can have a limited but positive impact if it’s done well,” Paul said.

This article is republished with permission from Talk Media News