Subject: WSJ: Donald Trump Amplifies His Stances on Tax Cuts, U.S.’s Debt
From: "Sarge, Matthew" <[email-masked]>
To: Comm_D <[email-masked]>
Date: Tue, 10 May 2016 07:28:18 -0700

Donald Trump Amplifies His Stances on Tax Cuts, U.S.’s Debt<http://www.wsj.com/articles/trump-reiterates-call-for-big-tax-cuts-1462826682>

Donald Trump sought Monday to clarify his views on fiscal and monetary policy, saying he was open to compromise on tax cuts but wouldn’t try to alter the terms of the nation’s $19 trillion in debt, which he called “absolutely sacred.”

In an interview Monday, the presumptive Republican presidential nominee moved to tamp down jitters over remarks in recent days suggesting he might push to renegotiate U.S. debt in an economic downturn.

“This is the United States government,” he said Monday. “The bonds are absolutely sacred.”

the party, Mr. Trump is also trying to lock down support among Republicans fearful he may stray from conservative policy stances. Mr. Trump is scheduled to meet this week with House Speaker Paul Ryan, an ardent tax cutter who has said he wants to better understand the New York businessman’s positions before backing his candidacy. After Mr. Ryan’s comments provoked a series of sharp exchanges between the two camps, the speaker said Monday that he would step aside as chairman<http://blogs.wsj.com/washwire/2016/05/09/paul-ryan-says-he-would-quit-as-convention-chair-if-trump-asked/> of the GOP nominating convention if Mr. Trump wanted him to.

On the debt issue, Mr. Trump suggested he would be open<http://www.wsj.com/articles/donald-trump-says-he-wouldnt-seek-to-renegotiate-u-s-debt-1462828948> to buying back Treasury notes if interest rates rise as a way to bring down the U.S. debt load. Bond prices fall as rates rise, which means the government theoretically could turn a profit by buying back debt for less than when it was issued.

“With the United States government there are times on occasion you can buy back debt at a discount, meaning the interest rate goes up and you buy back debt at a discount,” he said.

With the government now running large annual deficits, such a buyback would require issuing new debt to purchase the old debt. Because that new debt would be issued at higher interest rates, it isn’t clear that type of buyback would save money in the long run.

Mr. Trump also said he supported holding down the value of the dollar in order to help American manufacturing and the economy. “If the value of the dollar goes up, it would be at this point not a very good thing,” he said. Most American presidents typically advocate for a strong dollar.

On tax policy, Mr. Trump said that as president he would seek to persuade congressional Democrats to lower taxes on high-income households by trading on completely unrelated and unspecified policy issues.

“There will be a give and take. They’re going to want other things having nothing to do with this,” Mr. Trump said. “It’s one very big, very complex proposal, into a negotiation.”

He said he was also open to changing his tax plan unveiled last year, which proposed lowering tax rates, pushing 33 million households off the income-tax rolls and, according to an analysis, reducing federal revenue by nearly $10 trillion over the next decade.

It’s “always possible to change,” Mr. Trump said. “I always believe in flexibility and remaining flexible.”

Mr. Trump spoke after weekend TV appearances in which he said taxes on high-income households would go up<http://www.wsj.com/articles/donald-trump-says-wealthy-may-see-tax-increase-1462741116>, then later said they would rise only in comparison with his own tax-cutting proposal. His comments left some Republican tax experts trying to decipher what the party’s 2016 standard-bearer believes on a central GOP issue.

“He really does seem to be saying different things on different days to different people,” said James Pethokoukis, a columnist and blogger at the conservative American Enterprise Institute. “You can try to score, but you’re only scoring one version of his reality. And the reality changes on a daily, if not hourly, basis.”

Mr. Trump’s approach to policy veers sharply from the tightly controlled, thoroughly vetted style common in modern presidential campaigns. He hasn’t built the network of outside analysts and surrogates who would normally amplify a campaign’s carefully written policy message.

At the same time, Mr. Trump seemed to be nodding toward his experience as a dealmaker, saying that campaign policy proposals are just the starting point in a negotiation.

“He hasn’t made an effort to put people around him who can give him really solid advice about what to do, so this is what you end up with. You end up with this meandering thing,” said Lanhee Chen, a top policy adviser to Mitt Romney in 2012. “He is able to kind of brush it off in a way that makes it seem like he’s a savvy negotiator.”

“My core beliefs are I want a major tax cut,” Mr. Trump said in the interview. “And I’m only being honest with people. You can’t just say this is what my plan will be. You have to negotiate this with many other people, and those many other people are congressmen and senators, etc., and everybody knows that you have to do that.”

Aides to the likely Democratic nominee, Hillary Clinton, said Monday that voters should look past Mr. Trump’s imprecise language and instead focus on his actual plan, which he said Sunday was his “optimum” policy. The tax plan is the Republican’s most specific economic policy, said Clinton policy adviser Jake Sullivan, and Democrats will hold him to it.

“The only thing one can do is look at the black and white of his paper and not be fooled by his shifting comments,” said Gene Sperling, a Clinton adviser and former White House economic policy aide.

Mr. Trump’s proposal calls for cutting the top tax rate on wages to 25% from 39.6% and for lowering the top rate on business income to 15%. Corporations now have a top rate of 35%, and many businesses report their profits on their owners’ individual returns, taxed at 39.6%. Mr. Trump said there would be unspecified “rules and regulations” handled in “a very orderly manner” to prevent people from converting wage income into lower-taxed business income.

The Clinton campaign cited an analysis from the Tax Policy Center<http://www.wsj.com/articles/analysis-of-trumps-tax-plan-shows-big-cuts-in-taxes-federal-revenue-1450807194> showing that the top 0.1% of households would get as much in tax cuts from Mr. Trump as the bottom 60% would.

Mr. Sperling, who called the Trump proposal “risky” and “reckless,” cited estimates from the Tax Foundation, a conservative-leaning group that often produces results that show tax cuts boosting growth. Their analysis—after including economic growth—shows that Mr. Trump’s plan would reduce federal revenue by more than $10 trillion over a decade, expand budget deficits and give the income boosts to high-income households.

Mr. Trump dismissed those studies, in part because they didn’t look at something that isn’t knowable—the end result of tax negotiations that would occur after he becomes president.

“They don’t know what the final number is going to be after the negotiation, OK?” he said. “I’d love to say it’s going to stay where it is, but it won’t. It’s going to be something that’s negotiated. But also, we’re going to bring tremendous business to the country.”

Mr. Trump’s plan calls for “reducing or eliminating most deductions and loopholes available to the very rich.” Asked to be specific, Mr. Trump cited carried interest, the tax provision that lets some investment professionals pay lower capital-gains rates for managing other people’s money.

But under his plan, the 15% tax rate on business income would be lower than the 20% tax rate on capital gains. Investment managers would no longer need carried interest because they would rather be compensated in lower-taxed fees.

Asked to explain the contradiction, Mr. Trump said, “You’re right, depending on what the final deal is. But what I’m going to do and what my priority is going to be is business and middle income.”

Mr. Chen, the former Romney adviser who doesn’t support Mr. Trump, said he thought the Clinton campaign was running too traditional a response to the Republican’s policy agenda.

“The guy can go from X to Y, from A to Z so quickly,” Mr. Chen said. “They’re the aircraft carrier and he’s kind of the pirate ship.”