Robert Reich - Trumps Economic Plan will make the Rich Richer but the middle class will get trickled on

http://www.alternet.org/election-2016/reich-every-aspect-trumps-trickle-down-economic-plan-benefits-him?akid=14653.294211.RJEZvF&rd=1&src=newsletter1063916&t=10

Donald Trump poses as a working-class populist, but about his new economic plan would be a gusher for the wealthy. And almost nothing will trickle down to anyone else.

He’d knock down the top tax rate on businesses from 35 percent to 15 percent, thereby richly rewarding the investor class.

He’d cut taxes the top tax rate on the wealthy from 39.6 percent to 33 percent, another boon to the top.

He’d eliminate the estate tax—now paid by a relative handful of families whose net worth exceeds $5.5 million.

Not incidentally, this is an especial windfall for the Trump family. If Trump is worth as much as he says, his heirs would get a tax break of $4 billion to $7 billion.

He’d let global corporations pay just a 10 percent tax rate on untaxed offshore profits—another mammoth gift to big shareholders.

Consider: Apple, Pfizer, Microsoft and other global American corporations hold $2.4 trillion in earnings abroad. They owe some $700 billion in taxes on these earnings. Trump’s 10 percent tax rate would raise only about $150 billion. It wouldn’t even generate new investment in America. A tax amnesty was tried in 2004 and it was a dud.

Yes, he’d also lower taxes on lower-income Americans. But the biggest beneficiaries by far are the wealthy.

Trump says his tax cuts would cost $4.4 trillion over 10 years. He claims most of it would be paid for by economic growth.

We’ve been here before.

Both Ronald Reagan and George W. Bush tried supply-side “trickle-down” economics. We should have learned two lessons.

First, nothing trickles down. The giant tax cuts on the wealthy enacted by Reagan in the 1980s and Bush in the 2000s enriched those at the top—but the wages of the bottom 60 percent went nowhere.

Second, such tax cuts produce giant budget deficits. Under Reagan and George H.W. Bush, the federal budget deficit exploded. It took Bill Clinton’s administration (of which I was proud to have been a member) to get the budget back in some semblance of balance.

Then, under George W. Bush, what happened? The deficit exploded again.

Trump would do all this on a far grander scale. He’s also proposing a vast expansion of the military, including 90,000 new soldiers for the Army and nearly 75 new ships for the Navy. The tab: an estimated $90 billion a year in additional spending.

This would mean big bucks for military contractors. But it’s hard to see how economic benefits trickle down to anyone else.

Perhaps Trump is banking on an indirect fiscal stimulus—the kind of “military Keynesianism” Ronald Reagan employed to fuel growth in the 1980s. But as we learned then, this sort of growth doesn’t trickle down, either.

Trump also pledges a gigantic infrastructure building program to “build the next generation of roads, bridges, railways, tunnels, sea ports, and airports.”

Hillary Clinton has proposed spending $275 billion on infrastructure over five years.

The Donald is thinking much bigger. “Her number is a fraction of what we’re talking about,” says Trump. “We need much more money to rebuild our infrastructure. I would say at least double her numbers, and you’re going to really need a lot more than that.”

Okay, so let’s call this $500 billion over five years.

Trump doesn’t stop there. A “foundation” of his economic plan, he says, is to renegotiate Nafta, bring trade cases against China, and “replace the present policy of globalism—which has moved so many jobs and so much wealth out of our country—with a new policy of Americanism.”