Trump Under Pressure: Key Figures Urge Flat Tax and Softer Trade Stance

Donald Trump is facing pressure from economists in his circle to consider a flat tax rate, softer trade stance, and to maintain the state and local tax deduction. This push comes from prominent figures including Steve Forbes, former White House economic adviser Larry Kudlow, and economists Stephen Moore and Arthur Laffer, who are not official advisers to his campaign. Their focus is on stimulating the economy through lower taxes, which contrasts with current economic mainstream thinking.

Key Takeaways

• Economists are advising Donald Trump to consider a flat tax rate, softer trade stance, and maintaining the state and local tax deduction.
• Notable figures like Steve Forbes, Larry Kudlow, Stephen Moore, and Arthur Laffer are advocating for these proposals.
• These economists prioritize unleashing the supply potential of the economy with lower taxes, which diverges from current mainstream economic thinking.
• The proposals place them outside the economics mainstream today but were more conventional in the 1980s.
• The advisors are not officially part of Trump's campaign team, but their recommendations carry weight in economic discussions.

Analysis

Prominent economists, including Steve Forbes and Larry Kudlow, are pressuring Donald Trump to consider a flat tax rate, softer trade stance, and maintaining the state and local tax deduction. These proposals could have a significant impact on the US economy, potentially stimulating growth and reshaping economic policy. The push from these influential figures, although contrary to current mainstream economic thinking, may lead to a shift in policy discussions. The long-term consequences could include changes in tax policies, trade negotiations, and economic prioritization. This could affect not only the US economy but also global trade dynamics, impacting multinational corporations and financial markets.

Did You Know?

• Flat Tax Rate: This refers to a tax system where all taxpayers, regardless of income level, pay the same percentage of their income in taxes. This proposal suggests simplifying the tax system by implementing a single tax rate for everyone.

• State and Local Tax Deduction: This is a provision in the tax code that allows taxpayers to deduct certain taxes paid to state and local governments from their federal taxable income. Maintaining this deduction means taxpayers can reduce their federal tax liability by the amount of state and local taxes they have paid.

• Supply-side Economics: This approach focuses on stimulating economic growth by emphasizing reducing barriers to production, such as taxes and regulations. It is based on the idea that lower taxes will incentivize increased production and investment, leading to overall economic expansion.