Reprinted from WSWS
In his speech Monday to the Economic Club of Detroit, Republican presidential candidate Donald Trump embraced traditional right-wing nostrums about cutting taxes for the wealthy and slashing regulations on big business, claiming that the American economy would boom if only the wealthy were allowed to have their way completely.
The Trump's speech was a travesty of analysis, as he simply did not address the overriding economic issue confronting world capitalism: the deep economic slump triggered by the 2008 Wall Street crash, from which the world economy has yet to emerge. He said nothing about the financial collapse, the trillion-dollar bailout of the banks that followed, or the long-term consequences of that financial heart attack for world capitalism as a whole.
Remarkably, in a speech about economic policy delivered in Detroit, Trump made no mention of the auto industry bailout pushed through by the Obama administration, centered on the slashing of wages by 50 percent for new hires.
He did refer to the appalling social conditions in the city where he gave his speech, while indicting the Democratic Party as responsible. But he was silent on the most recent catastrophe, the bankruptcy of Detroit, which led to wage cuts, mass layoffs and the destruction of pensions and health benefits, in which politicians of both big-business parties -- the Republican governor and state legislature and the Democratic mayor and city council -- played major roles.
The Republican candidate rattled off a string of figures about the dismal state of the US economy, prepared by his speechwriters, demonstrating that labor force participation, median household income and economic growth rates are down, while food stamp use, poverty and black youth unemployment are up.
His "solutions," however, consisted of a combination of right-wing Republican boilerplate -- cut taxes on business and the rich, slash regulations, end all restrictions on oil drilling and coal mining -- and strident economic nationalism.
In effect, he was addressing two audiences. For the businessmen and right-wing political operatives who filled the seats at the invitation-only meeting, Trump offered trillions in tax breaks plus deregulation. For manufacturing workers and the unemployed, a major target of his election campaign, he offered tub-thumping and completely empty pledges to revive American steel, automobile, coal-mining and other heavy industries by excluding foreign imports and waging trade war against economic rivals of American capitalism.
It was notable that his business audience applauded loudly for the promised tax cuts, but largely sat on their hands when Trump declared his opposition to NAFTA and other trade deals, and pledged that "Americanism, not globalism" would be the watchword of a Trump administration. The giant Detroit-based General Motors and Ford, like their corporate counterparts elsewhere, operate globally, pitting workers in every country against each other in a race to the bottom for wages, benefits and working conditions.
There is little doubt that were Trump to enter the White House, he would do nothing to curtail the overseas operations of giant US corporations, while he would move rapidly to cut their taxes, along with the taxes of wealthy families and the estate taxes that only a tiny fraction of the super-rich (the top 0.2 percent) actually pay.
There were relatively few policy details in the hour-long speech, but Trump did indicate that he was shelving the tax cut proposals he made during the campaign for the Republican nomination in favor of the plan adopted by House Republicans, which calls for reducing income tax brackets to three and cutting the top tax rate from 39.6 percent to 33 percent.
The direct impact of these cuts would be a bonanza for the wealthiest families, while taxes would decline only marginally or not at all for middle-class and working-class families. According to the Tax Foundation, families in the top one percent would see a 5.3 percent increase in after-tax income, while middle-income families would gain 0.2 percent, and families in the bottom 40 percent would gain nothing at all.
Trump proposed the complete abolition of the estate tax, which has gradually eroded over the years as bipartisan congressional action has raised the amount of estates that are exempt from tax from $1.35 million for a couple in 2001 to $11 million today. Only 52,000 estates paid the tax in 2000, but this has dropped to one-tenth that number, only 5,000 estates, in 2013. One major beneficiary of abolishing the "death tax," as Trump labeled it, would be his own children, since they would be able to inherit his fortune (assuming it exists) tax-free.
The only specific measure Trump proposed for Americans who are not rich was a tax break for childcare expenses. Even this would benefit primarily the upper layers of the middle class, since it would be structured as a tax deduction rather than a tax credit, meaning the nearly 70 percent of the population who do not itemize deductions on their tax returns would gain nothing.
For those who could claim it, the benefit would be heavily skewed to higher-income families. By one calculation, a family making $500,000 and spending $10,000 a year on childcare would net nearly $4,000. A family making $50,000, with the same childcare expenses, would get back only $1,500, even though they would need the money more.