Trump’s Stances

July 24, 2016

Based off my own anecdotal interactions, I feel Trump excites Americans more than Hillary, and thus to me feels likelier to win the Presidency. As such, I’m going to take some time to look over his stances — not the endless speech content, just what’s listed on his campaign website.

Compelling Mexico to pay for the wall

Trump wants to extort Mexico into giving the United States “$5–10 billion” by threatening to outlaw remittances to Mexico.

Should Mexico refuse to pay the racket, Trump says he will pressure Congress to change the definition of ‘financial institution’ in the Code of Federal Relations to include wire transferers, which it already does since a ‘money transmitter’ is considered a ‘financial institution,’ so that the nationalities of transferers can be identified. With the unnecessary law revision, his campaign says he will then have the power to issue an executive order under the USA PATRIOT Act of 2001 to suspend bank accounts believed to be connected to terrorism-related financing and money laundering, to block wire transfers from unauthorized foreign nationals in the United States.

He will then violate the North American Free Trade Agreement by instituting tariffs against Mexico, cancelling all visas held by Mexican nationals, and increasing use taxes on new visa sign ups and border-crossing identification cards.

It’s interesting that the first stance on his website isn’t building a wall, but extorting Mexico to pay for it. I guess his campaign assumes you’re already aware of his stances, or comes from the angle that the wall must be paid for before it can be built.

The problem I have when researching the stance is this: I can find the section referenced in the PATRIOT Act, the one that requires financial institutions to validate information for fighting terrorism and money laundering, but I can‘t find the referenced Code of Federal Regulations statute. It doesn‘t exist. It‘s not there. His campaign either didn‘t check for typos or didn‘t think anyone would actually go look at it. Further, as mentioned previously, wire transfers already require customer identification.

Trump wants to require money transmitters to validate customer identification so that “no alien may wire money outside of the United States unless the alien first provides a document establishing his lawful presence in the United States.” I’m not sure how that will work when it comes to international commerce, but maybe it will be worded to only apply to ‘alien natural persons’ or a business‘ taxpayer identification number will suffice.

In either case, I‘m not sure what this does that Social Security Numbers, which are issued to authorized alien residents, don‘t already do. The kink in making banks validate their walk-in customer‘s identification is that they‘re obviously going to accept drivers licenses and state identification cards. Some states, such as California, allow undocumented residents to apply for drivers licenses and state identification cards to become documented, so good luck.

Further, Trump‘s campaign says this extortion racket will work because “$5–10 billion” is a paltry sum compared to the “$24 billion [that] continues to flow into [Mexico] year after year,” and “Mexico needs access to our markets much more than the reverse.”

The problem with that is I’m not sure if it’s true. It seems to me Americans need the Mexican labor market much more than Mexico needs American goods. Sure, Mexican oil businesses really want Halliburton and Baker–Hughes drill bits, but American businesses rely on Mexican agricultural, manufacturing, and assembly labor, not to mention our love of the ever-popular Mexican Coke and Corona. I personally would be quite upset to see Sidral Mundet Manzana Verde disappear.

American consumers demand inexpensive products, which requires inexpensive labor, which requires trade liberalization. The side effect of that liberalization, particularly with Mexico, is an improved standard of living for our neighbors across the border, and a reduction in crime as self-interested individuals seek to preserve and protect their personal property. Further, remittances are a bit like free market foreign aid. Would a free marketer really limit them?

When Mexico doesn’t pay the $5–10 billion extortion, despite already paying towards our current border security, Trump will look like a wimp and alienate his Montana Minutemen base as the establishment Republicans in Congress don’t help him roll back trade liberalization.

Healthcare reform to make America great again

Trump wants to eliminate the Affordable Care Act. Unfortunately that’s beyond his power, requiring an act of Congress, but he will be able to sign any such measures Congress sends his way.

I have my misgivings about the Affordable Care Act. It’s not healthcare. There’s no public option. It rightly expanded federal medical services to lower-income persons, but for everyone else it’s just a mandatory health insurance scheme. Individuals are forced to either buy health insurance from for-profit insurance monopolies or face penalty taxes.

Trump is right that it resulted in higher premiums and fewer choices, but he’s not right about it resulting in less competition and greater rationing of care. You can still buy any private insurance plans you had previously, just at a higher price since healthy and unhealthy persons can’t be charged different rates. You also can’t choose not to have insurance from a for-profit company without spending some of that money anyway in penalty taxes for no gain.

You see, my problem is that the premiums paid amount to nothing should you actually need to use the insurance. Often you will need to exceed a certain amount of spending before coverage will kick in. If you’re sick, the act was very helpful. If you’re healthy, it’s no different from being forced to pay a utility bill each month for a random house you can’t even visit. I would much rather pay mandatory taxes to the government instead of mandatory premiums to a for-profit company.

The fastest growing familial expense since the passage of the act is paying mandatory health insurance premiums and penalty taxes.

Trump’s campaign wants to “completely repeal Obamacare.” I don’t think that’s wise as it would deprive many individuals who need health insurance from having it, either by a loss of the expanded Medicaid coverage or a return of existing-condition denials. If anything, the act should be reformed to include a public option, not repealed.

Trump’s campaign wants to eliminate the individual mandate. I wouldn’t mind that as there’s no public option.

Trump’s campaign wants to allow “the sale of health insurance across state lines.” That makes sense at first glance. But at first glance you’ll realize that’s how things are now, as most insurers cover multiple state markets. After a second or two you’ll realize they mean selling, for example, the Mississippi-tailored insurance plan to California residents in lieu of the California-tailored plan with its state-mandated additional required coverage, such as poisoning coverage.

You know, it’s not a terrible idea as long as buyers are forced to buy the plans on the other state’s exchange and visit the other state’s hospitals for uncovered things. Borders are arbitrary. Someone living along a state border, for example, in Moscow–Pullman, Lewiston–Clarkston, or any other place like that, might appreciate being able to buy health insurance in the state they work and buy groceries in but happen to live a few hundred feet too far from.

Trump’s campaign wants to “allow individuals to fully deduct health insurance premium payments from their tax returns.” If we’re not going to have a public option, and people are required to buy health insurance, I agree.

Trump’s campaign wants to “allow individuals to use health savings accounts.” We have these. They’re called health savings accounts. “Contributions into HSAs should be tax-free and should be allowed to accumulate.” That’s how HSAs are. “These accounts would become part of the estate of the individual and could be passed on to heirs without fear of any death penalty.” And there we go. He wants to turn HSAs into an estate tax loophole. He further wants to allow HSAs to be used by “any member of the family without penalty.” That’s not bad, but if such a ‘landed gentry’ HSA account variant were to be created, it should exclude the possibility of non-medical withdrawals, requiring tax evaders to go through the extra step of setting up a fake medical office.

Trump’s campaign wants to “require price transparency” allowing individuals to shop around. To my knowledge, nothing stops that now.

Trump’s campaign wants to “block-grant Medicaid to the states” because “the state governments know their people best and can manage the administration of Medicaid far better without federal overhead.” I disagree given that many states don’t offer their residents services equally. Block grants are also quite permissive, so the Medicaid funding might not be spent funding Medicaid programs.

Trump’s campaign wants to “remove barriers to entry into free markets for drug providers that offer safe, reliable and cheaper products.” That’s the FDA’s job. And if the drug’s not yet known to be reliable, it can still be administered through expanded-access programs, compassionate-use trials, and single-patient access with an informed-consent sign off.

Reforming the U.S.–China trade relationship to make America great again

There’s so much wrong here that it would take forever to enumerate it all. Trump’s campaign claims China’s admission to the World Trade Organization forced over 50,000 United States factories to close and “tens of millions of jobs” to be lost. I don‘t even know where the numbers come from.

Trade liberalization is give and take, a balancing of international comparative advantages, absolute advantages, and local labor interests. The United State might lose a plunger factory in New York, but it frees up that capital to build a world-supplying toilet factory in Tennessee. Someone lost their job, but another person gained theirs.

Trump’s campaign goes on to say “America fully opened its markets to China but China has not reciprocated. Its Great Wall of Protectionism uses unlawful tariff and non-tariff barriers to keep American companies out of China and to tilt the playing field in their favor.” That doesn’t make sense. Goods sold in America must still adhere to American regulations. That’s why European cars must be retrofit with American light fixtures. That is why South Korean display panels must be Energy Star certified. I can only imagine this stance stems from Trump’s own experience in dealing with Chinese laws while outsourcing his own businesses.

For companies to do business in China, it must enter into a joint-venture with local organizations, generally a local township’s work group at the discretion of its local authorities. China is very different from the United States, and this joint-venture also helps provide a liaison for foreign businesses to navigate guanxi and shequ. It’s also Chinese law. I’m sure Trump would be upset if, say, foreign businesses didn’t have to abide by our laws when doing business here.

Trump wants to “bring China to the bargaining table by immediately declaring it a currency manipulator.” That’s the whole bullet point. It doesn’t go any further. It’s a stupid statement, too. The United States is a currency manipulator. All countries that can manipulate their currencies do manipulate their currencies. European countries that adopted the euro now being unable to manipulate their currencies is a big part of the whole debt crisis over there.

One thing that everyone who reads this will hate but I agree with is that Trump wants to “lower our corporate tax rate.” The United States has the highest corporate taxes in the world, a holdover from a pre-globalized world when the government could set it at whatever rate it wanted, and there’s little to no point to it. Money held in a corporation can’t be spent by an individual unless it becomes income, at which point it’s subject to income taxes.

Trump further wants to “attack our debt and deficit so China cannot use financial blackmail against us.” Every Presidential candidate since the New Deal has said that they’re going to cut spending. It’s never done. The government’s largest expenses, medical and social insurance programs, are not subject to budget appropriations, and it turns out the elderly vote quite likes them.

Further, the statement hinges on a common misunderstanding of what government debt is. The debt is just what money the government owes to investors, like how a bank owes you money if you deposit it with them. Further, if tax brackets and everything were never adjusted going forward, the debt would settle itself through bracket creep and inflation. The deficit is the problem. It requires adding more debt to the pile. And while it’s a very real problem, dismantling it without touching the untouchable social insurance programs is impossible without possibly cutting military spending, which Trump won’t do because he says we must bolster “the U.S. military presence in the East and South China Seas,” like the United States, Philippines, and Australia have.

And besides, if China, Saudi Arabia, or any other country wants to dump their treasuries on our secondary debt markets, that’s perfectly within their rights. People might even love it. I’d certainly pick some up on the cheap. The pension funds required by their charter to only hold treasuries will certainly go on a shopping spree too, and they have a bunch of unfunded liabilities they need to fund.

Trump goes on to give a sermon about Chinese trade deficits, never mentioning that many goods, such as software, don’t show up in such numbers. A trade deficit is to be expected too, since we’re such heavy consumers, consuming more per capita than any other nation.

Trump then says he supports “a system of truly free trade and floating exchange rates” yet he speaks mightily like a protectionist that doesn’t recognize another nation’s sovereignty over its own matters.

Trump talks all this game about currency manipulation without mentioning the biggest loser of that manipulation: the Chinese themselves. Take Venezuela as an example: Maduro sure as hell isn’t hurting, but the Venezuelan citizens under him are, and all the foreign corporations that supplied wages and goods have left the country. As a “truly free trade” supporter, maybe Trump should stop talking about meddling in the market and let individuals choose for themselves whether or not to do business with China.

I love how he then goes on to talk about how Chinese piracy must be stopped, particularly given the United States’ own history as a pirate nation. He talks about companies being forced to license their intellectual property to Chinese companies to gain access to the Chinese market, but if they’re doing so, it sounds like it’s must be a mutually beneficial transaction. Trump sure sounds like a nanny.

He complains about the Chinese government granting subsidies to Chinese companies, as if the United States doesn’t do the same. He says it distorts markets, as if all subsidies don’t distort free markets.

Veterans Administration reforms that will make America great again

I have nothing to say about this section. There’s nothing wrong about it, nothing objectionable. He wants to allow veterans to have access to any Medicare-accepting medical office. There’s nothing wrong with that, as long as it isn’t a conspiracy to inundate Medicare offices with backlog to make them look bad and worth gutting.

Even better, I think, would be consolidate Veterans Affairs, Medicare, and Medicaid under a single healthcare public option that all residents of the United States can access, but what do I know.

Tax reform that will make America great again

Trump wants to lower the middle class’ taxes. Never heard that one before!

He wants to simplify the tax code. Good. It’s a labyrinthine mess, and it’s like that on purpose, for the benefit of Intuit of TurboTax, Quicken, QuickBooks, certified public accountants, and tax preparers everywhere. He should tell Congress to fix that.

He wants to grow the American economy by adding jobs and discouraging corporate inversions. That’s nice of him.

All of this tax cutting while somehow not adding to our “debt and deficit, which are already too large,” despite them being alright relative to our gross domestic product.

Trump wants to raise the standard deduction up to $25,000. Sounds alright. I agree. It’s a bit of a joke that we declare people as being in poverty but make them pay taxes. It’s like that because conservatives want poor people to have ‘skin in the game.’

He wants to make the tax brackets 0%, 10%, 20%, and 25%. Okay, now things are starting to get questionable, but let’s let him continue.

He wants to get rid of the marriage penalty. Okay, nothing wrong with that. It’s only a detriment to high-income marriages and benefits low-income marriages, but maybe it can be reconfigured to retain the benefit for low-income marriages while being neutral for high-income marriages.

He wants to get rid of the Alternate Minimum Tax. Alright, so now we’re getting on to tax issues that only affect the richest in society. You only hit this when your tax obligation is too low due to a liberal use of deductions and tax-minimization strategies relative to your income. But let’s give him the benefit of the doubt. Maybe his new tax plan is so simple and ironclad that the AMT is no longer necessary. He does say he wants to get rid of some deductions after all.

“No business of any size, from a Fortune 500 to a mom and pop shop to a freelancer living job to job, will pay more than 15% of their business income in taxes.” Now this one makes no sense. Freelancers are generally sole proprietors, so their work would be taxed at the 0–25% brackets mentioned earlier, not 15%. Mom and pop shops are generally structured as pass-through entities, so their gains would also be taxed 0–25%, not 15%. The 15% tax for Fortune 500s makes sense, but corporations are taxed off profit, not income.

“No family will have to pay the death tax.” There we go. I knew it’d come up. Trump wants to eliminate the 35% estate tax that only affects inheritors of over five million dollars in assets on top of a primary residence. You could make the case of wanting to keep a family business within the family without its assets being skimmed, but that’s one of the benefits of structuring your business behind a corporate form or any other kind of trust.

The estate tax is good for society. It keeps an aristocracy from forming. And an inheritor of over five million dollars in assets and a primary home is set for life. There is no case to be made for its repeal that isn’t just self dealing. If the estate tax gets repealed, at least society can take solace in most familial wealth being destroyed by the third if not the second generation. Turns out, those who inherit money aren’t as good at managing it as those who made it.

The problem with all of this, is there’s no way this plan won’t increase the deficit. The only way to make it work would be eliminate social insurance programs. At least we can take solace in taxes being drafted by Congress, not Presidents.

Further, there’s no mention of FICA, SECA, NIIT, payroll, or anything else. You’d think someone so pro-entrepreneur would mention literally anything about payroll taxes.

Protecting our Second Amendment rights will make America great again

There’s nothing in here that isn’t obvious. People like guns. The right to keep and bear arms is a constitutional right until a majority of Congress and state legislatures disagree, yadda yadda yadda. The vagueness of what ‘arms’ constitute might even be a good thing.

Immigration reform that will make America great again

Yet more nationalist rhetoric about a nation without borders or laws in service to its citizens not being a nation.

He believes Mexico has stolen the United States. He wants to make Mexico pay for border security it already funds. He wants to end expatriate remittances. He wants to increase use taxes on visas and crossing cards.

He wants to triple the number of Immigration and Customs Enforcement officers. He wants to institute a national citizenship verification database. He wants to round up and deport all lawbreaking undocumented persons, which may as well be all undocumented persons when you start from the position that being undocumented requires unauthorized entry which is illegal.

He wants to detain all those caught crossing illegally. He wants to defund sanctuary cities, which are many major metropolitan areas, from all federal grants, including Washington D.C. as a federal district so that might get tricky.

He wants a visa tracking system installed and visa overstayers to see jail time. He wants Immigration officials to work more closely with local law enforcement to combat MS13 and the 18th street gang.

He wants to end ‘land right’ citizenship leaving only ‘blood right’ citizenship, restricting citizenship to those whose parents are citizens or those who spend decades naturalizing. That would likely require an amendment to the Constitution.

Scary stuff. At least unauthorized immigrants have Fourteenth Amendment rights, as per Plyler versus Doe.