Donald Trump outlines his ‘American model’, plan for ‘dramatic’ tax cut but may end up hurting other nations

By: | Updated: September 4, 2017 8:14 PM

President Donald Trump has said the US administration is embracing a new economic model, which he refers to as the "American model', in a bid to bring the country back from the "dead". O

donald trump, us tax code, donald trump op-ed, donald trump american model, trump news, donald trump on tax, us tax reformPresident Donald Trump (R) departs St. John’s Episcopal Church as First Lady Melania Trump shakes hands with Assistant Rector D. Andrew Olivo after they attended services for a national “Day of Prayer”, for victims of the Hurricane Harvey flooding in Texas, in Washington, U.S., September 3, 2017. (REUTERS)

President Donald Trump has said the US administration is embracing a new economic model, which he refers to as the “American model”, in a bid to bring the country back from the “dead”. On Sunday, Trump published an Op-Ed article in Journal Sentinel to explain his vision. “…my administration is embracing a new economic model: the American model. Under this system, we will encourage companies to hire and grow in America, to raise wages for American workers and to help rebuild our American cities and communities.” Trump said this will help Americans succeed “as one team” with “one shared sense of purpose, and one glorious American destiny.”

Trump claimed the American economy, which has burdened US citizens with heavy taxes, is a “broken system” and his government would fix it. Trump said “destructive tax code” in the US has cost millions of jobs and “trillions of dollars and billions of hours spent on compliance and paperwork.”

The US President said that for the first time in 30 years, his government plans to reform the tax code and work with the Congress on a plan which is “pro-growth, pro-jobs, pro-worker and pro-American.”

According to Trump, the new plan will “dramatically reduce income taxes for American workers and families. It will nearly double the standard deduction to help families get ahead. It will make our complex tax code more simple and fair… And it will bring back American jobs by making our businesses competitive once again.”

The US President rued that no reform in the tax code since President Ronald Reagan’s tenure in 1986, has put America behind all developed countries of the world like France, Germany, Canada, Ireland, Japan, Mexico and South Korea. He said developed nations have reduced business tax rates over the years. “Over the past 30 years, the average business tax rate among developed nations in the Organisation for Economic Co-operation and Development (OECD) fell from 45% to less than 24%.”

However, as far as the US is concerned, Trump said his country witnessed a rise in taxes. “American businesses today are effectively taxed at 39%.”

With these reforms, Trump wants to create a situation where American companies would like to work from the US first. He said the absence of “competitiveness” in the US forces large corporations “to export jobs to other countries and then ship their goods back to the United States.”

“Other businesses — even classic American brands — have been acquired by foreign competitors or have moved their headquarters overseas,” he added. All of this proved to be a “disaster for American workers”

However, Trump’s inward-looking plan to bring back so-called lost jobs to the US may end up hurting jobs in other nations where these corporations are heavily invested.

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