Republican presidential candidate Donald <strong>Trump</strong> waves after delivering an economic policy speech to the Detroit Economic Club, Monday, Aug. 8, 2016, in Detroit.Evan Vucci/The Associated Press
Donald Trump laid out a revised tax reform plan, renewed his assault on NAFTA and other major free-trade deals and vowed to ditch an array of federal energy measures in a major economic speech to the Detroit Economic Club. It was an effort to reboot his struggling presidential campaign by focusing on his perceived strength as a business operator and convince mainstream Republicans he's their best hope of achieving their cherished goals of lower taxes, less onerous regulations and smaller government.
Here's a look at some of his comments and key parts of his "economic vision," which remains big on rhetoric and light on detail.
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Corporate taxes
"The United States has the highest business tax rate in the industrial world," Mr. Trump said, in repeating his proposal to end "job-killing taxes" by slashing the corporate rate to 15 per cent from a top level of 35 per cent.
The reality:
Most corporations never pay anything close to the top listed rate, and a large number pay little or no income tax, thanks to a plethora of loopholes and deductions. Eliminating most of them and installing a lower and more widely applicable base rate would be a positive. But previous efforts to attack loopholes have run aground in Congress.
And even at current levels, the U.S. ranks far down the global list when looking at tax revenue as a percentage of GDP – more than five percentage points below Canada's take. Even Luxembourg, known as a tax haven for business, takes a bigger bite than Washington.
Related: How a Trump presidency would affect Canada's economy
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Personal income taxes
All would be lower than current levels. But the big adjustment is an increase in his top tax rate to 33 per cent from 25 per cent. His proposed bottom rate would jump to 12 per cent from his initial 10, and the middle rate would be 25 per cent instead of 20. He would still slash the number of tax brackets to three from seven.
The reality:
When Mr. Trump unveiled his initial tax plan last September, it called for lower taxes across the board, accompanied by the closing of loopholes. Tax experts concluded the wealthy would benefit disproportionately and the national debt would balloon over the next decade. It's still an approach that favours the wealthy, particularly with his plan to abolish the estate tax, and would put a deep dent in the Treasury. But the new levels happen to match those outlined by House Republican leaders in June.
Since this is all about getting the likes of Paul Ryan on board, the revision makes a lot of political sense. But it still carries a high price tag and a new proposal to make child-care costs fully deductible will add an estimated $20-billion (U.S.) to the total cost.
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Trade
Mr. Trump repeated his pledge to pursue "a total renegotiation of NAFTA," linking it to the loss of 120,000 automotive jobs. If Mexico and Canada don't agree, he'll simply walk away.
The reality:
NAFTA actually helped make the North American auto industry more competitive by reducing costs and expanding market clout. Supply networks have been tightly integrated and any attempt to change its terms would invite similar demands from Canada and Mexico. A wide range of other businesses and regulations that developed over the past two decades would also be affected by any moves to alter the agreement substantially.
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Energy
"We will put our coal miners and our steelworkers back to work."
The reality:
Mr. Trump's plan calls for removal of "job-killing energy restrictions" and climate-change policies that have forced coal-fired plants to close or spend hefty amounts of capital on emission controls. But no amount of nostalgia for a dirtier environment is going to bring those mining or steel jobs back, because demand is going to continue to fall. There is no mention in his plan of the rapidly growing renewable-energy sector, which will actually be a major job driver in coming years. His idea of "an energy revolution" doesn't extend much beyond more shale oil and gas and ending curbs on offshore drilling. Never mind that cheaper domestic oil and gas supplies make Big Coal even more uncompetitive.
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Keystone XL
The pipeline remains on Mr. Trump's radar, although he made no mention of the project in his speech.
The reality:
Calling on TransCanada Corp. to reapply for Keystone approval fits in with Republican congressional support for the venture. It's not clear if Mr. Trump still wants a piece of the financial action for Washington in return. That would violate World Trade Organization rules and other assorted international laws. But he has bizarrely said in the past that he would consider taking the United States out of the WTO.