Tax Policy

Federal Deficit And National Debt

Jobs And Unemployment

Economic Growth

Paid Family Leave

The Federal Reserve

Trump Has A Long History Of Misinforming About The State Of The American Economy

Tax Policy

Myth: Trump Claimed That “We’re The Highest Taxed Nation In The World.” Republican presidential nominee Donald Trump told ABC’s George Stephanopoulos on May 8 that he wants lower taxes on businesses and the middle class because the United States is the “highest taxed nation” in the world. [Media Matters, 5/8/16]

Fact: “The United States Is Far From The Most Taxed Nation.” Looking at 2014 data from 33 other industrialized countries in the Organization for Economic Cooperation and Development, PolitiFact determined Trump’s claim to be “False,” noting that the U.S. “does have one of the highest top marginal corporate tax rates in the world” but that it is “far from” the “highest taxed nation in the world.” Based on an annual report from the World Bank and PricewaterhouseCoopers, an average American company in the U.S. would have a total tax rate of 43.9 percent after accounting for taxes on labor, profits, and property, making it 64th out of 189 countries, according to PolitiFact. [PolitiFact, 5/8/16]

Myth: Trump Campaign Claimed “Hillary Clinton Vows To Raise Taxes On The Middle Class.” The Trump campaign circulated a video on August 4 claiming that Clinton had stated at a rally, “We are going to raise taxes on the middle class”:

[DonaldJTrump.com, 8/4/16]

Fact: Media Ripped Apart Trump’s “Pants On Fire” Falsehood. ThinkProgress slammed Trump for the misleading claim that Clinton promised to raise taxes on the middle class, noting that the video’s poor sound quality made it unclear if Clinton said, “We aren't going to raise taxes,” which she did say, or “We are going to raise taxes,” which Trump falsely claimed she said. PolitiFact rated this Trump claim as a “Pants on Fire” lie after linguistics professor Alan Yu of the University of Chicago analyzed Clinton’s speech with an audio program that assesses phonetics and concluded, “We can see that Clinton was saying ‘aren’t.’” On January 26, the conservative-leaning Tax Foundation reported that Clinton’s tax plan would have no effect on tax rates for the bottom 90 percent of earners. [Tax Foundation, 1/26/16; ThinkProgress, 8/5/19; PolitiFact, 8/5/16]

Myth: Trump Claimed Clinton “Wants To Raise Taxes On African-American Owned Businesses To As Much As Nearly 50 Percent.” RealClearPolitics reported on an August 25 speech Trump gave in order to defend what he claimed were “decent voters she is trying to smear” minutes before Clinton would deliver a speech denouncing the so-called “alt-right.” During the speech, Trump claimed Clinton wanted to “raise taxes on African-American owned businesses to as much as nearly 50 percent.” [RealClearPolitics, 8/25/16]

Fact: Clinton Plan Increases Taxes On The Top 0.02 Percent Of Small Businesses. PolitiFact gave Trump’s claim a “False” rating on August 26 because “nothing [Clinton] has proposed approaches boosting taxes by almost 50 percent.” The fact-checker noted that Clinton’s plan does include a 4 percent surcharge on income over $5 million annually that would lift the top tax rate to 47.4 percent, but that charge would only tax income over $5 million and would affect just 0.02 percent of all small businesses. [PolitiFact, 8/26/16]

Myth: Trump Claimed His Proposed Tax Cuts “Will Be Concentrated On The Working And Middle Class.” Trump updated his tax proposal for the second time on September 15, focusing on his commitment to “shrink nondefense spending,” his proposal to reduce federal government spending by 1 percent annually, and his proposal to cap some deductions available to some high-income Americans. With these changes Trump claimed “tax relief will be concentrated on the working and middle class taxpayer,” adding that “this is a working and middle class tax relief proposal.” [DonaldJTrump.com, 9/15/16; Media Matters, 9/28/15, 8/9/16, 9/15/16]

Fact: Trump’s Latest Plan Favors The Rich And Reduces The Size Of Tax Cuts For Middle-Income Earners. Slate economic correspondent Jordan Weissman referred to the tax cuts Trump has directed to middle-income earners as “basically worthless” on September 19, adding that under Trump’s economic plan middle-income earners “get very little, while upper-income Americans reap a windfall.” According to the right-leaning Tax Foundation, while Trump’s latest tax plan does not give as gigantic of a tax break to high-income individuals as he had previously proposed, the plan would still reduce federal revenue by up to $5.9 trillion over the next decade, with much of those tax savings going to the wealthy. The revised tax plan costs less than the $10 to $12 trillion in additional debt he originally proposed, but much of the savings were achieved by reducing the size of tax cuts for low- and middle-income earners. [Slate, 9/19/16; Tax Foundation, 9/29/15]

Myth: Trump’s Tax Cuts Pay For Themselves. Trump claimed during a September 15 speech outlining his renewed tax agenda that his plan would cost $4.4 trillion and that the loss in revenue is reduced to $2.6 trillion “under a dynamic growth model” in which tax cuts can pay for themselves by boosting economic growth. [DonaldJTrump.com, 9/15/16]

Fact: Tax Cuts Do Not Pay For Themselves. FiveThirtyEight economics writer Ben Casselman analyzed Trump’s plan in light of the Tax Foundation’s September 19 report and explained that the foundation’s “dynamic scoring” methodology -- which Trump’s plan also utilizes -- could actually overstate estimated economic growth spurred by the proposals. Casselman noted that differences in how economists attempt to accurately estimate how the market may react to tax cuts, along with a lack of clarity from the Trump campaign itself on a key part of his plan, means the true impact of the revised plan could be more economically detrimental than the analysis suggests. The idea that tax cuts pay for themselves has been continually debunked for years but remains a core tenet of conservative tax policy. According to a September 2014 Brookings Institution report by economists William G. Gale and Andrew A. Samwick, tax cuts do not always create economic growth, and they can even discourage growth by undermining economic incentives to invest. Meanwhile, according to a September 2012 report by the Congressional Research Service (CRS), reducing top income tax rates does not correlate to increased economic growth, but lowering top rates does “appear to be associated with the increasing concentration of income at the top of the income distribution.” [Congressional Research Service, 9/14/12; Brookings Institution, September 2014; FiveThirtyEight, 9/19/16]

Federal Deficit And National Debt

Myth: Trump Claims He Can Erase $19 Trillion National Debt In Two Terms As President By Renegotiating Trade Deals. During April 2 interview with The Washington Post, Trump claimed he could eliminate the country's $19 trillion national debt, which has accumulated over the course of more than two centuries, “over a period of eight years” while still pushing a “very big tax cut.” According to the Post, Trump claimed the “economic growth he foresees as a consequence of renegotiated deals would enable the United States to pay down the debt.” [The Washington Post, 4/2/16]

Fact: Trump's Proposal Is “A Fantastical Notion.” In a fact check, The Washington Post’s Glenn Kessler gave Trump's claim that he can eliminate the debt in eight years “Four Pinocchios” -- the highest rating for the most egregiously incorrect claims -- writing on April 2, “We regret we have only Four Pinocchios to give for this whopper.” Kessler pointed to “basic math” to explain “why this is a fantastical notion,” noting that first, Trump would need to eliminate the deficit, which is set to increase over the next eight years. Then, even if he reduced discretionary spending, renegotiated trade deals, and increased revenues, that would still not eliminate the debt in eight years. [The Washington Post, 4/2/16]

Myth: Trump Claimed He Could Use His “Swashbuckling” Approach To Renegotiating U.S. Debt. During part of an hour-long CNBC interview ostensibly focused on the Federal Reserve’s domestic monetary policy decisions, Trump hyped concerns of runaway interest rate inflation and said that the “swashbuckling” approach he had used to renegotiate private debt deals could be employed to “refinance debt” owed by the United States Treasury. [Media Matters, 5/8/16]

Myth: Trump Suggested “Print[ing] The Money” To Pay Down National Debt. Trump told CNN’s Chris Cuomo on the May 5 edition of CNN’s New Day that The New York Times and other publications had misrepresented his previous hint at defaulting on the national debt. Trump claimed he never said he would default on debt because, “I hate to tell you,” but the U.S. would “never” default on its debts because the government can “print the money” it needs to cover obligations. [CNN, New Day, 5/9/16]

Fact: Experts Say Printing Money To Buy Back Debt Would Be “Disastrous For The Economy,” Call Trump’s Proposal To Renegotiate Debt “Alarming.” CNN’s chief business correspondent, Christine Romans, lambasted Trump’s ideas about the federal debt on the May 10 editions of CNN’s Early Start and New Day, describing his proposal to renegotiate outstanding federal debt -- a move tantamount to default -- as “alarming.” Romans reported that experts say “Trump doesn't have a coherent idea of what he’s talking about” and that printing money to pay debts would be “disastrous for the economy” because of the inflationary pressure it would put on the money supply. [Media Matters, 5/10/16]

Jobs And Unemployment

Myth: Unemployment Is “Probably 28, 29, ... 35” Percent; “I Even Heard Recently 42 Percent.” After winning the New Hampshire primary in February, Trump told the crowd not to believe the 4.9 percent and 5 percent unemployment numbers reported by the Bureau of Labor Statistics (BLS). The Republican nominee told supporters the actual unemployment rate is closer to 30 percent, and that he “even heard recently 42 percent.” He had previously made the same claim in an interview with Time magazine in August 2015. [Time, 8/20/15; The Washington Post, 2/9/16]

Fact: Trump's Estimate Is “Ridiculous” And Comes Straight From Right-Wing Media. In an August 2015 fact check of Trump's 42 percent unemployment claim, The Washington Post's Glenn Kessler ruled that “Trump has asserted a ridiculous estimate.” Kessler clarified that though Trump backed up his statement with the figure that 93.7 million people are out of work, “the vast majority of those people do not want to work” and most are retirees. Kessler gave Trump's claim his most extreme rating for untruthfulness, “Four Pinocchios.” Media Matters has tracked numerous examples of right-wing media and politicians like Trump falsely claiming that the “real” unemployment rate is far higher than reported and that more than 90 million Americans are “not working” thanks to supposedly failed Democratic policies. [The Washington Post, 8/21/15; Media Matters, 9/15/16]

Myth: Trump Plan Will “Create A Total Of 25 Million New Jobs.” As part of Trump’s September 15 speech on his latest tax plan, he claimed “over the next ten years, our economic team estimates that under our plan the economy will average 3.5 percent growth and create a total of 25 million new jobs.” [DonaldJTrump.com, 9/15/16]

Fact: Trump’s Job Claims Are “Not Feasible.” Moody’s Analytics chief economist Mark Zandi blasted Trump’s promise to create 25 million new jobs as “not feasible” on the September 15 edition of CNN's The Lead with Jake Tapper. Zandi added that to fill that many new positions you would need to “more than double current legal immigration into the country.” On the September 16 edition of CNN’s Early Start, co-host Christine Romans reported that experts have expressed “plenty of skepticism” about Trump’s plan of creating 25 million new jobs over the next 10 years without “increas[ing] immigration dramatically,” which would be contrary to Trump’s immigration plan. [CNN, The Lead with Jake Tapper, 9/15/16; CNN, Early Start, 9/16/16]

Myth: Trump Will Bring Manufacturing Jobs Back From Overseas. Trump promised to “bring back our jobs” in a speech on June 28, by implementing a seven-step trade reform agenda, including renegotiating or leaving the North American Free Trade Agreement (NAFTA) and winning trade disputes against China at the World Trade Organization (WTO). [Politico, 6/28/16]

Fact: Trump’s Trade Promises Are “A Scam, Skillfully Pitched To Fool The Gullible.” Conservative Chicago Tribune columnist Steve Chapman chided Trump’s simplistic look at global commerce on June 29, saying the “expansion of manufacturing jobs is not synonymous with prosperity” and that Trump’s promises are “a scam, skillfully pitched to fool the gullible.” Chapman pointed out that manufacturing output in the United States is actually “54 percent higher today” than it was when NAFTA went into effect in 1994 and “27 percent higher” than it was before China joined the WTO in 2001 despite job losses in export-focused industries. Economist Lawrence Mishel, the president of the Economic Policy Institute (EPI), also slammed Trump’s “scam” in a June 29 statement berating the GOP nominee for using EPI research to mislead the public while pushing right-wing corporatist tax and economic policies that would hurt working Americans. EPI has pointed out many of the negative consequences that free trade agreements have had on the American labor market, but as Chapman noted, part of the decline in manufacturing employment is the result of greater efficiencies in production stemming from automation and technological advances. [Economic Policy Institute, 4/13/15; Media Matters, 6/30/16, 6/30/16]

Myth: Trump Claimed Black Communities Are “In The Worst Shape They've Ever Been In Before.” Trump claimed at a September 20 rally at the Duplin County Events Center in Kenansville, NC, that “African American communities are absolutely in the worst shape they've ever been in before. Ever, ever, ever,” and at a August 22 rally he had claimed the federal government “totally failed” people of color and “it is a disaster the way African Americans are living.” He asked, “What do you have to lose?” [The Washington Post, 8/22/16, 9/20/16]

Fact: Trump “Missed That Whole Civics Lesson About Slavery.” President Obama criticized Trump’s campaign comments about black people at the September 17 Congressional Black Caucus Phoenix Award Dinner, saying he “missed that whole civics lesson about slavery and Jim Crow.” PolitiFact rated Trump’s statement “Pants On Fire” false for disregarding the history of slavery and segregation and also noted that the current unemployment rate for black people is at one of its lowest levels since 1972 and that the poverty rate for black people is lower than it has been for much of the past 50 years:

[MSNBC, Dateline Extra, 9/17/16; PolitiFact, 9/22/16]

Myth: Trump Claimed “Because Of Obamacare, You Have So Many Part-Time Jobs.” PolitiFact reported that Trump claimed at a Phoenix rally on June 18 that “because of Obamacare, you have so many part-time jobs,” and companies are giving workers only part-time hours because of the “horrendous Obamacare rules and regulations.” [PolitiFact, 6/22/16]

Fact: The Number Of Part-Time Jobs Has Seen “An Almost 30 Percent Drop” Since Obamacare Went Into Effect. PolitiFact gave Trump’s claim a “False” rating on June 22 because the number of part-time jobs in America had actually dropped from 9.2 million in April 2010 -- the first month under Obamacare -- to 6.4 million in May 2016 -- the most recent data available at the time -- and because multiple studies saw little evidence of Obamacare affecting part-time versus full-time employment. Trump’s lie about health care reform driving American workers into unfulfilling part-time jobs is another mainstay he picked up from years of right-wing media misinformation about the economy. According to a survey from January through June 2015 by the Kaiser Family Foundation and the Health Research & Educational Trust released September 22, 2015, “relatively small percentages” of businesses required to provide insurance to full-time employees by the Affordable Care Act (ACA) responded to the health insurance mandates by switching to more part-time positions or deferring hiring decisions. In fact, more employers reported switching part-time workers to full-time status than reported scaling down full-time work. [Media Matters, 9/22/15; PolitiFact, 6/22/16]

Myth: Trump Claimed “The Obama-Clinton War On Coal Has Cost Michigan Over 50,000 Jobs.” Trump misleadingly claimed Michigan had lost 50,000 coal jobs during the Obama administration in a speech on August 8 at the Detroit Economic Club in which he attempted to tie this supposed domestic policy failing to Hillary Clinton. [Fortune, 8/8/16]

Fact: Michigan Is Not A Coal-Producing State. PolitiFact rated Trump’s claims as “False” on August 9 because the state of Michigan is not even a coal-producing state and its electric power plants -- including coal plants -- have less than 20,000 employees. Trump’s campaign claimed he was talking about lost jobs from potential coal plants that had not been built due to regulatory burdens. But the fact-checker was quick to point out that the state’s shift from coal was not caused by Obama or Clinton but rather by both “the utilities themselves” and the state’s Republican governor, who in a January 2015 conference stated, “Now is the time to look at a long-term transition away from coal,” and has been moving the state toward natural gas plants. Trump, along with right-wing media outlets, has frequently distorted comments Clinton made during the Democratic primary campaign about her plans to revitalize coal country in an attempt to blame her for job losses in the coal industry. In reality, employment in the coal industry has been in steady decline since a brief boom in the 1980s thanks to automation and changes in extraction methods, and it is down nearly 90 percent since the 1920s despite a massive increase in output. [PolitiFact, 8/9/16; Media Matters, 3/15/16, 5/11/16]

Economic Growth

Myth: Trump’s Running Mate Oversaw A “Very Unusual” Amount Of Job Growth, More Than Other States. The Washington Post reported that Trump heaped praise on Gov. Mike Pence (R-IN) when announcing Pence as his running mate on July 16, falsely claiming that the state of Indiana saw “very unusual” economic growth and job creation compared to other states during his tenure. [The Washington Post, 7/16/16]

Fact: Indiana’s Growth Mirrored The National Trend. On July 21, The Wall Street Journal compared Indiana’s unemployment rate to that of neighboring Ohio and the national average, demonstrating that the two states follow a trend roughly in keeping with the nation overall. Politico reported on July 19 that “the drop in Indiana’s unemployment rate almost perfectly mirrors the national trend”and that “the labor force has grown in all but nine states.” A report by The Associated Press (AP) on July 20 also found that the state’s unemployment rate “largely paralleled the national mark.” [Media Matters, 7/21/16]

Myth: Trump Claimed His Tax Plan Would Grow The Economy By 3.5 Percent. According to a tax reform outline and speech transcript published online by the Trump campaign, the Republican nominee is promising to increase economic growth to 3.5 percent per year on average during his time in the White House by reducing regulations, marginal income tax rates, and government spending. [DonaldJTrump.com, 9/15/16, 9/15/16]

Fact: Trump’s “Pie In The Sky” Promises On Economic Growth Will Be “Pretty Much Impossible” To Fulfill. On the September 15 edition of MSNBC’s The Place for Politics, economist Marc Goldwein of the nonpartisan Center for a Responsible Federal Budget (CRFB) criticized Trump’s reliance on so-called “dynamic scoring” to boost economic growth estimates spurred by proposed tax cuts and regulatory changes. Goldwein argued that Trump’s proposed tax changes could spur growth by “a couple of decimal points per year, not a couple of percentage points per year” and since the American population is getting older, such growth going forward is “pretty much impossible.” Other economists and experts argued that Trump’s promise of job creation and economic growth is contradicted by trade policies he has proposed, which would shrink the potential size of the economy, and said that his claims rely on “magical thinking.” [Media Matters, 9/15/16]

Paid Family Leave

Myth: Trump’s Plan “Is Not For The Wealthy, But Rather Provides The Biggest Benefit To Working- And Middle-Class Families.” Trump unveiled a maternity leave plan that would extend unemployment insurance to provide six weeks of benefits after giving birth, “create new Dependent Care Savings Accounts (DCSAs) so that families can set aside extra money to foster their children's development,” and create new child care tax deductions for individuals making up to $250,000 a year and $500,000 for couples. According to the Trump campaign, “his plan is not for the wealthy, but rather provides the biggest benefit to working- and middle-class families.” [DonaldJTrump.com, 9/13/16]

Fact: Trump’s Maternity Plan Would Not Apply To “More Than 40 Percent Of U.S. Taxpayers” And “Would Create A Potential Tax Shelter For Wealthy People.” The AP noted that Trump’s plan to “reduc[e] child care costs by allowing parents to fully deduct the average cost of child care from their taxes” would not apply to “more than 40% of U.S. taxpayers,” who “don't make enough money to owe taxes to the federal government” in the first place. The AP also reported that the Center for American Progress’ Carmel Martin said Trump’s proposed “Dependent Care Savings Accounts,” intended to “allow families to set aside money to look after children or elderly parents,” would in fact “create a potential tax shelter for wealthy people.” Martin also pointed out that Trump's proposals “remain tilted to the rich because the low-income child-care rebates top out at $1,200.” [The Associated Press, 9/13/16]

Myth: Trump Plan Would Allow Parents To Make Decisions “Without Bias From The Tax Code.” According to the Trump campaign, his maternity leave proposal and other reforms “will allow a family to make the choice of whether a parent should work outside the home or not without bias from the tax code.” [DonaldJTrump.com, 9/13/16]

Fact: Trump’s Plan Leaves Out New Fathers, Adoptive Parents, Paid Sick Leave, And Family Leave While Making Things Worse For Mothers. ThinkProgress economic policy editor Bryce Covert highlighted several shortcomings in Trump’s proposal, including that his focus on maternity leave “would mean that new fathers and potentially all adoptive parents would be completely left out” along with any workers “whose parents become sick” as well as “anyone who went through a major illness.” Covert also explained that the focus on maternity leave could actually encourage discrimination against working mothers and “all women of childbearing age” by making them potentially more costly than their male counterparts. Extending parental leave to both mothers and fathers would reduce the “motherhood penalty” faced by women in the workforce, she wrote. The exclusion of paternity leave would by definition exclude some LGBT families from his plan, the AP has noted. [Media Matters, 9/13/16]

The Federal Reserve

Myth: The Federal Reserve Chair Is “Very Political.” On the September 13 edition of CNN's New Day, co-host Chris Cuomo played audio of Trump criticizing Federal Reserve Board Chair Janet Yellen, saying that “she’s keeping [interest rates] artificially low” to help the president and claiming that “she’s very political.” [CNN, New Day, 9/13/16]

Fact: “The Fed Is One Of The Least Political Institutions In Washington Right Now,” According To CNN’s Rana Foroohar. On the September 13 edition of CNN's New Day, global economic analyst Rana Foroohar debunked Trump’s claim, noting that “the Fed is one of the least political institutions in Washington right now” because “Fed governors have long terms. The whole system is set up to make it less political.” Foroohar explained that the Fed had been keeping interest rates so low “over the last eight years to goose the economy because of congressional gridlock.” [CNN, New Day, 9/13/16]