The election of Donald Trump has brought numerous changes in the social, political, and economic life of the United States. Despite that the nature of these changes is debatable, it could be hardly doubted that Mr. Trump has vastly influenced modern America. However, it is of high importance to analyze how practices and policies, implemented by the president, has impacted the economy of the nation. This paper aims to answer the question if Mr. Trump’s decisions influenced the economic condition of the United States positively or adversely.
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First of all, it is essential to discuss the tax reform and Mr. Trump’s perspective on that question. In several decades prior to the election of the current president, the marginal rates were growing along with the expansion of carve-outs and credits. This process resulted in significantly high tax rates, namely 39,6% for individuals and 35% for corporations. Therefore, when Donald Trump was elected, he proposed a plan for the development and improvement of the current tax system. This plan included two primary aspects: to change both individual and corporate taxes. Concerning the personal level, it was proposed to do the following: (1) to reduce the number of tax brackets from seven to three, (2) to provide more generous deductions, raising them from 6300 dollars to 15000 dollars for single filers. On the corporate level, it was proposed to cut the tax rates for the majority of businesses, corporations, and partnerships. In particular, Mr. Trump suggests that pass-through income should not be a subject to individual taxes and the tax rate for it should be set by 15%.
Concerning the implementation of the discussed tax reform, it is possible to notice that there are numerous procedural hurdles, which put it into question. For example, the proposition to replace the Affordable Care Act (ACA) by passing the American Health Care Act poses significant challenges for the implementation of the tax reform due to the loss in revenue, caused by the repealing of taxes levied by the ACA. Also, it is possible to observe that lowering marginal tax rates by reducing exclusions will create a situation when a small group of people loses tax breaks and a more prominent group of people benefits from the fast economic growth. In overall, it should be noted that Mr. Trump’s tax reform, being a significantly beneficial document for individuals and businesses, is far from completion in its implementation.
Further, it is possible to discuss one of the most controversial policies, which were implemented by Mr. Trump, namely the immigration policy, and its economic impact. After Mr. Trump was elected, he signed several executive orders (EOs), related to the immigration. These EOs included such decisions as the restriction of travel from several Muslim countries (namely, Syria, Iran, Yemen, Sudan, Somalia, Libya, and Iraq), reinforcement of the system for deportation of illegal immigrants, and the strengthening of the border control. In overall effect, it is possible to suggest that these decisions have a purpose of establishing a more restrictive immigration policy, compared to the previous ones. Therefore, the impact of such policy-making in the economy of the United States could be predicted.
One of the principal implications which are caused by the implementation of new immigration policy will be the reduction of foreign workers’ amount. For example, the restriction for traveling from the mentioned Muslim countries has significantly affected the potential students and highly-educated professionals, making them choose for a destination other than the United States. It is evident from numerous studies that foreign scientists and professionals contribute to the development of American scientific innovations along with the productivity level on the local scale. Therefore, it could be concluded that there would be a significant decrease in productivity and salaries of American workers caused by the reduction of foreign specialists.
Concerning the reinforcement of deportation policy, it should be stated that the entire economic sectors of America would be adversely influenced by it. It is evident that the illegal immigrants are holding the workplaces which are not demanded by the native-born American workers, who prefer such jobs as supervisors, managers, and accountants in the same sectors. Therefore, it is evident that the reduction of the unregistered workforce will influence negatively on the current state of the United States economy on large-scale, and it will slow down the development of numerous economic sectors and decrease the number of workplaces for native-born American workers.
However, the positive impact of Mr. Trump’s policies should also be mentioned. First of all, the significant growth in stock market rates appears to be one of the principal positive changes, conducted by the president. It is estimated that since 8 November 2016 the equates increased in value of around 4 trillion dollars. Another positive aspect that should be mentioned is the growth of the U. S. GDP rate, which has averaged 2,5 percent over the first three quarters of 2013. Nevertheless, it is evident that Mr. Trump fails to provide the promised 4 percent growth, and due to the failure of his other economic policies, it is possible to conclude that the current increase of GDP rates is conditioned by the legacy of Obama’s presidency.
In conclusion, it should be stated that, based on the current policies of Mr. Trump, the future of American economy is worrying. This paper investigated several political trends related to new immigration policy that could have a significant adverse impact on the development of the U. S. Also. The positive changes were also investigated; however, they do not appear to be considered beneficial.
Chu, B. (2017). What has Donald Trump achieved for the US economy 12 months after winning the Presidency? Independent. Web.
Mayda, A. M., & Peri, G. (2017). The economic impact of US immigration policies in the Age of Trump. In C. P. Bown (Ed.), Economics and Policy in the Age of Trump (pp. 69-78). London, UK: CEPR Press.