Trump’s Tax Proposals: Boon or Boondoggle?

President Donald Trump’s tax proposals are interesting, to say the least. On May 4, 2017, The Economist magazine talked with Trump about the proposals. Steve Mnuchin, treasury secretary, and Gary Cohn, director of the National Economic Council also were present.

Trump suggested that the elimination of certain taxes, including, for example, taxes paid by the wealthy for the Affordable Care Act, would result in tremendous savings for taxpayers.

The proposals also call for drastic cuts in many social and environmental programs. However, the cuts to these programs would not offset deficits caused by less money coming in from taxes.

When questioned by The Economist about the increase in deficits, Trump said such deficits were “priming the pump.”

He claimed the deficits would only last a couple of years and then magically disappear because eliminating the taxes would result in a stronger economy. Trump officials talk of a 3% growth rate, which most economists think is unsustainable. (While campaigning, Trump talked of a 5% growth rate.)

The Economist’s assessment of the tax proposals:

“Trumponomics is a poor recipe for long-term prosperity. America will end up more indebted and more unequal. It will neglect the real issues, such as how to retrain hardworking people whose skills are becoming redundant.” (The Economist, “Courting Trouble,” May 13, 2017.)

According to The Economist, Trumponomics “is not an economic doctrine at all. It is best seen as a set of proposals put together by businessmen courtiers for their king.”

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