Trump unveils plan for tax cuts

WASHINGTON: Republican presidential nominee Donald Trump unveiled a plan on Thursday for $4.4 trillion (R62.8 trillion) in tax cuts, offering less generous tax breaks than his original $10 trillion plan but proposing to cut the current top rate for the wealthiest taxpayers.

Trump’s proposal would reduce the top individual rate to 33 percent from the current 39.6 percent. It would raise the standard deduction and cap itemised deductions, which he said would reduce tax loopholes. Trump said his plan would not add to the federal deficit.

Trump said the $4.4 trillion tax cut would actually cost less, about $2.6 trillion, under a mechanism known as dynamic scoring, which assumes that tax cuts will lead to faster growth, which in turn would allow at least some of the tax breaks to pay for themselves.

Trump also offered a “Penny Plan” for cutting federal spending. He said he would shrink government programmes other than defence by 1 percent each year. But entitlement programmes such as social security and medicare would be shielded from any cuts.

The original tax plan laid out by the New York businessman last September was criticised by Democrats and Republicans alike for its costly price tag. Democrat Hillary Clinton, who will face Trump in the November 8 election, denounced it as catering to the very wealthy and ignoring the working class.

Some economists also questioned the assumptions underpinning the plan.

In his speech to the Economic Club of New York, Trump predicted his updated package - to reduce taxes, curb government regulation and take a tougher stance on negotiating trade agreements - would produce annual economic growth of 3.5 percent.

He said the plan would create 25 million jobs over a decade and set 4 percent as a goal for economic growth. – Reuters