The Trump Riddle Wrapped Up in an Enigma

by Veronique De Rugy | March 31, 2016 12:03 am

The front-runner for the Republican presidential nomination, businessman Donald Trump, has been called a lot of things by the media and his adversaries. When it comes to his policy positions, however, it’s difficult to put a political label on him.

Veronique De Rugy1[1]

For instance, though he holds some pretty standard free market positions on taxes, he’s far from being a purist on the issue. On one hand, he would cut the top marginal individual rate to 25 percent and reduce the number of brackets to three to encourage productive behavior. However, his plan fails to remove most double taxation of income saved and invested and fails to eliminate many deductions for special interest groups. He would also remove a large number of taxpayers from the tax rolls, exacerbating the illusion that government services are free.

On the corporate tax side, he would cut the rate to 15 percent because he understands that having the current high tax gives an incentive to businesses to move abroad. But then he would fail to end the punishing and inefficient practice of taxing revenue abroad.

On budget issues, he’s no libertarian, either. In June, he said he would impose a one-time 14 percent tax on the wealthy to pay down national debt. His math doesn’t work — and the impact on the economy would be pretty negative — but at least it shows that he is aware of our gigantic debt. Still, as far as I can tell, his only budget reduction plan is to push some functions, such as education and environmental protection, back to the states and cut some waste. There’s nothing wrong with that, except that it wouldn’t do much to address our growing $19 trillion debt.

Unlike most free market advocates, Trump is adamant that he wouldn’t touch such drivers of our future debt as Social Security and Medicare. He has said, “Social Security isn’t an ‘entitlement’; it’s honoring a deal.” Never mind that the Supreme Court ruled in 1966 that there is no deal and Congress can change the law — and hence the benefits — at any time. As for the program’s solvency problem, Trump thinks he could address that by getting rid of the “tremendous” waste that plagues the system. No way.

Borrowing the rhetoric of the left, Trump also wants to give health care to everyone and have the government pay for it because he doesn’t want people dying in the street. His actual health care plan confirms that he isn’t very familiar with health care policies and that he is highly tolerant of government intervention.

On trade, Trump also breaks with the imperfect but traditional Republican support for free trade to embrace fair trade (a very leftist concept). For instance, he has talked about imposing a 45 percent tariff on imports from China and a 35 percent tax on cars made in Mexico. Unfortunately, he ignores that protectionism is costly to American consumers while doing nothing to address some of the real unfair trading practices around the world.

But that doesn’t make him a liberal, either. He’s anti-illegal immigration. He thinks that many people who are here illegally are involved in serious criminal activities. This explains his desire to deport them. He is anti-birthright citizenship and wants to temporarily ban Muslims from entering America.

He is also anti-minimum wage, as he thinks it destroys the economy. He is against gun control and rightly understands that most laws are ineffective at preventing gun violence. However, he also claims, without much evidence, that mass shootings point to “a huge mental problem.”

Finally, his foreign policy positions are also all over the place. He wants to deal with “the maniac in North Korea” with nukes. He doesn’t rule out using nuclear weapons against the Islamic State terrorists. Interestingly, he calls NATO obsolete and rightly notes that European governments should stop relying so heavily on our military dollars. In October, he even said he would cut the defense budget.

The bottom line is that the businessman doesn’t communicate a set of fixed principles, and he openly departs from much of the Republican orthodoxy. Needless to say, if he gets the nomination, it’ll be interesting to see the impact it has on a party with which only 26 percent of voters identify.

Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University.

Also see,

Reforming Corporate Taxation Is a Bipartisan Issue

Endnotes:
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