VRMCA2015 Annual MeetingVA Beach, October 6

“Presidential Politics and the US Economy”

Daniel PalazzoloProfessor of Political Science

University of Richmond

Mar 2008

Aug 2008

Mar 2009

Aug 2009

Mar 2010

Aug 2010

Mar 2011

Aug 2011

Mar 2012

Aug 2012

Mar 2013

Aug 2013

Mar 2014

Aug 2014

Sept 2

014

Mar 2015

June 2015

Sept 2

0150

2

4

6

8

10

12

5.1

6.5

8.710

9.8

9.5 8.9

8.2

8.2

8.17.5

7.26.7

6.1

5.9

5.5

5.1

5.1

Unemployment Rate: March 2008-Sept 2015(Bureau of Labor Statistics)

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

60.0

61.0

62.0

63.0

64.0

65.0

66.0

67.0

66.0

66.2

66.2

65.8

66.1

65.4

64.764.1

63.5

63.2

62.8 62.4

Labor Force Participation Rate: 2004-2015(Bureau of Labor Statistics)

Trump Tax Plan Goals• Middle Class Tax Relief

– Maintain deductions and credits for middle class– Eliminate Marriage penalty and Alternative Minimum Tax

• Simplification– Four brackets– Eliminate all estate taxes

• Economic Growth– Corporate Tax Rate 15%– Repatriate Corporate Profits at 10% rate– Eliminate Corporate Loopholes– “Reasonable” Business Expensing

• Fiscal Responsibility?

Trump Tax Rates

Income Tax Rate

Long Term Cap Gains/ Dividends Rate

Single Filers

Married Filers

Heads of Household

0% 0% $0 to $25,000

$0 to $50,000

$0 to $37,500

10% 0% $25,001 to $50,000

$50,001 to $100,000

$37,501 to $75,000

20% 15% $50,001 to $150,000

$100,001 to $300,000

$75,001 to $225,000

25% 20% $150,001 and up

$300,001 and up

$225,001 and up

Trump Effects(Tax Foundation)

• Strategy makes sense and gains over 10 years– 11.5% GDP growth – 29% increase in capital investment– 5.3 million jobsBut…-Revenues decline by $10.2 trillion-Publicly held debt would increase from 77% to

125% of GDP

Jeb Bush Tax Plan

• Individual Income Taxes– Three rates from seven: 28%, 25% and 10%– Double the Standard Deduction– Eliminates Marriage Penalty and ATM– Expands Income Tax Credit– Maintain charitable deductions– Cap deductions for the wealthy

• Corporate Taxes– Cut rate from 35% to 20%– Repatriate Corporate Profits at 8.75% (10 years)

Bush Effects(Tax Foundation)

• Gains over 10 years– 10% GDP growth – 28.8% increase in capital investment– 2.7 million jobs– Increase revenues by $1.6 trillion

Marco Rubio Tax Plan

• Individual Taxes– Two simple brackets—15% and 35%.– Replace standard deduction with personal exemption

and credit– New child credit of $2500– Eliminate the marriage penalty and estate taxes

• Corporate– 25% top rate– Full expenses of investments– Exempt business from repatriating cash

Rubio Effects(Tax Foundation)

• Gains over 10 years– 15% GDP growth – 49% increase in capital investment– 2.7 million jobs– Increase revenues by $1.7 trillion

Hillary Clinton Economic Plan

• Expansive agenda • See: • https://www.hillaryclinton.com/issues/plan-

raise-american-incomes/

Bernie Sanders 10 year Economic Plan

• Medicare for All ($15 trillion)• Increase Social Security ($1.2 trillion)• Infrastructure ($1 trillion)• College Affordability ($750 billion)• Paid family leave ($319 billion)• Bolster private pensions ($29 billion)• Youth Jobs Initiative ($5.5 billion)• Increase minimum wage to $15 per hour by 2020Revenues: ($6.5 trillion)

- Increase income, capital gains, and estate taxes on earners who make $250,000 and above

GOP Nomination Process: Two Schools of Thought

New School• Outsider Prevails

– GOP base is tired of politics as usual

– GOP Politicians have not delivered needed change

– Grassroots needs to takeover the process

– 50% or more voters are consistently supporting an outsider

Traditional School• Republicans eventually fall

in line– Winner needs to raise $– Winner needs

organization/endorsements– Too early to make much of

polls: voters will come around– Need to link together

establishment with grassroots

GOP Tracking Poll: 2015(realclearpolitics ave: 9/17-10/1)

Trump Carson Fiorina Rubio Bush Cruz0

5

10

15

20

2522.8

17.3

11

9.5

8.3

6.1

GOP Nomination 2007-08

Guiliani Thompson Huckabee Romney McCain0

5

10

15

20

25

3028

27

14

23

20

15

12Oct-07Dec-07

GOP Nomination 2011-12

Romney Perry Cain Gingrich Santorum0

5

10

15

20

25

30

35

40

2326

9 9

3

23

10

25

12

1.7

22

32

3.5

28

14

34

Oct 2 2011Nov 1 2011Dec 17 2011Feb 12 2012

Fundraising(through 2nd quarter)

Bush Carson Cruz Fiorina Rubio Trump0

20

40

60

80

100

120

11.4 10.614.4

2.29.8

1.9

103.2

6.8

38

3.4

16

IndividualSuperPac

Endorsements

• Bush– 5 Governors– 7 Senators– 25 House Members– 15 Statewide

• Rubio– 1 Governor– 5 House Members– 5 Statewide

Trump’s Endorsements

Winning in N. Korea

Dennis Rodman Kim Jong Un