With the presidential election roughly a month away and the second debate on Sunday, the race for the White House is coming down to the wire.
One of the biggest issues that will impact the final stretch of the campaign will be the economy.
Americans consistently been most worried about their own economic standing in elections and this year will be no different.
To get a full grasp of where she stands, we’ve broken down the ideas of Democratic nominee Hillary Clinton based on proposals on her website and statements she’s made. We’ve also included analysis of the proposals by economists.
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Clinton’s plan calls for increasing taxes for people who make over $5 million a year by 4%, in what her campaign calls the “Fair Share Surcharge.” Additionally, Clinton would make it so that people making more than $1 million a year do not pay an effective tax rate (after deductions) under 30%.
For corporations, Clinton plans to prevent “inversions,” in which companies move their headquarters overseas in order to pay a lower rate, and charge an “exit fee” on companies moving their businesses outside the country.
According to the Tax Policy Center, Clinton’s plan would decrease investment from the top earners but would also significantly reduce the federal deficit.
“And the proposals would raise marginal tax rates on labour and capital, thus reducing incentives to work, save, and invest among high-income households,” said the report. “The proposals would increase federal revenues by $1.1 trillion over the next 10 years and would therefore reduce future deficits and slow, somewhat, the accumulation of public debt.”
Clinton has introduced a number of measures to try to produce job growth. In addition to investing in infrastructure and manufacturing, Clinton has emphasised ending “quarterly capitalism,” which focuses on returns to shareholders. Clinton aims to get businesses to focus on labour and capital investment by modifying capital-gains taxes, giving tax credits for long-term investments and new hires, and “shedding a light” on excessive stock buybacks.
“And here’s something that you don’t always hear enough of from Democrats: a big part of our plan will be unleashing the power of the private sector to create more jobs at higher pay,” Clinton said in a speech on August 11. “And that means for us, creating an infrastructure bank to get private funds off the sidelines and complement our private investments.”
Regulation on Wall Street
Clinton has said that she would strengthen regulation on financial institutions and also crack down on nonfinancial lending from the “show banking” sector. Additionally, Clinton’s plan calls for reducing compensation to executives at financial institutions in the event of fines from regulators.
“While institutions have paid large fines and in some cases admitted guilt, too often it has seemed that the human beings responsible get off with limited consequences — or none at all, even when they have already pocketed the gains,” said Clinton in a speech on July 13. “This is wrong, and on my watch, it will change.”
Clinton also attacked Trump for cheering for the financial crisis and low regulations so he coudl profit off of buying cheap real estate. Clinton said that Trump wants to return to the system that helped set up the crisis.
One of the biggest economic issues of the campaign has been trade. In the first debate, Clinton does not have a specific trade plan but has pledged to fight the TPP, a deal she once helped to create. In general, Clinton has shifted from pro free trade to something of a trade sceptic.
“My message to every worker in Michigan and across America is this: I will stop any trade deal that kills jobs or holds down wages, including the Trans-Pacific Partnership,” said Clintonduring a speech in Michigan in August. “I oppose it now, I’ll oppose it after the election, and I’ll oppose it as president. As a senator, I fought to defend New York’s manufacturers and steel makers from unfair Chinese trading practices.”
Clinton also noted in the first debate that the US is “5% of the world, and we have to do business with the other 95%” through trade.
Both candidates have emphasised the importance of investing in American infrastructure and spending federal money on projects. Trump has said that the country needs to rebuild “crumbling” roads and bridges, while Clinton has similarly said that rebuilding infrastructure is key to America’s future.
Clinton’s plan calls for a five-year, $275 billion investment into a variety of projects, including airport modernisation and Wi-Fi accessibility in rural areas.
“So we have to rebuild the infrastructure we have, and we have to build a stronger future together because every community in our country, every single one of them, deserves clean water, clean air, clean energy, and think of the millions of people we can put to work, including some of those laborers right down there in the front,” said Clinton during a speech in California in July.
What economists say
A number of Wall Street researchers have weighed in on the economic plans of Clinton and Trump. The consensus is that Clinton’s plan would roughly maintain the status quo from President Obama’s tenure.
“Our expectations for a Clinton presidency do not require changing our outlook for growth, policy, earnings, and inflation,” said James Sweeney, chief fixed-income economist at Credit Suisse.
If Clinton is able to follow through on all her stated goals, however, it could put pressure on business investment and keep economic uncertainty high enough to curb some growth.
“How left of center Clinton is once in office will determine the degree to which uncertainty drag diminishes post-election,” wrote Dana Peterson, a North American economist at Citi in a note to clients in August. “Uncertainty could remain elevated or even increase if Clinton pursues the more populist aspects of her campaign platform (e.g. ‘America First’ attitude towards trade, aggressively higher taxes, more intense regulation of the financial sector, leaning too hard on China).”