As a seasoned economist who has witnessed the ebb and flow of economic policies over several decades, I find Project 2025 to be a fascinating yet concerning blueprint for America’s future. Having seen the impact of various fiscal and monetary policies on our economy, I can’t help but wonder if we have learned enough from our past mistakes to embark on such ambitious changes.
During the escalation of the 2024 presidential election, both Republican and Democratic contenders are swiftly adapting their views on cryptocurrencies. At a recent Bitcoin conference in Nashville, Donald Trump and other candidates voiced strong support for crypto, vying for votes in this sector. However, it’s worth noting that the Project 2025 Policy Agenda fails to address Bitcoin or cryptocurrencies altogether.
It’s plausible that Project 2025 aligns with President Trump’s past policies and declarations, making it possible that if he regains the presidency, this project could be carried out. Regardless of personal opinions on this, the question remains: what impact might this have on American citizens?
The Genesis and Goals of Project 2025
The Heritage Foundation’s “Project 2025” is a detailed, 900-page conservative strategy, designed to streamline the U.S. federal government, which many consider overly expansive. This plan encompasses suggestions for tax reforms, energy production, labor laws, and social issues. If adopted by the next Republican president, Project 2025 could significantly alter America’s political and economic landscape.
As a researcher, I am referring to Project 2025, a comprehensive plan that was meticulously developed by approximately 400 conservative thinkers under the supervision of former officials from the Trump administration, specifically Paul Dans and Spencer Chretien. This project serves as a strategic blueprint for the forthcoming Republican presidency, advocating substantial changes within federal agencies, reversing climate policies, and adjusting economic strategies. Notably, this plan has gained traction among conservative circles, being viewed as a potential framework for a possible second Trump administration.
Sweeping Tax Reforms
A key controversy surrounding Project 2025 revolves around its suggestion to reform the existing U.S. tax system, which is often criticized as being overly intricate and burdensome due to its seven tax brackets ranging from 10% to 37%. During a heated debate with Donald Trump, President Biden expressed his intention to address this issue by simplifying the tax structure. Instead of the current seven brackets, Project 2025 proposes a streamlined system featuring only two brackets: a flat rate of 15% for incomes under around $168,000 and a higher rate of 30% for larger earnings. Furthermore, the plan intends to eliminate most deductions, credits, and exclusions, although it does not specify which ones will be phased out.
Although this proposal appears sensible, some economists caution that these modifications might result in substantial tax hikes for average income earners.
As a hardworking family man striving to provide for my loved ones, I can empathize with families who are struggling to make ends meet. The proposed 15% flat tax could potentially add an extra burden to their financial strains, particularly if the Child Tax Credit is eliminated. However, hearing Vice Presidential candidate J.D. Vance’s comments on This Week with George Stephanopoulos on August 11th, I am hopeful that the Trump ticket’s plans to expand the Child Tax Credit could bring some relief to families like mine. As a parent myself, I understand the importance of supporting our children and alleviating some of the financial pressures that come with raising a family. Expanding the Child Tax Credit would be a step in the right direction towards ensuring that families like mine can continue to thrive and focus on what truly matters – providing for our loved ones.
The Republican National Committee (RNC) advocates for the permanent enactment of the tax cuts and job-related measures introduced by the Trump Administration. Specifically, they aim to keep in place the provisions that increased the standard deduction, expanded the Child Tax Credit, and stimulated economic growth nationwide. Additionally, they intend to abolish taxes on tips earned by restaurant and hospitality workers, and strive for further tax reductions.
Under Project 2025, affluent families might experience significant tax savings. For instance, a married couple making $5 million annually could potentially save up to $325,000 in taxes. However, it’s worth noting that such high earners are relatively uncommon in the U.S., as the average personal income is approximately $63,214 and the median household income stands around $74,580, according to US Census data.
Corporate and Capital Gains Taxes
The proposal for Project 2025 includes lowering the U.S. corporate tax rate from 21% to 18%, with the goal of boosting investments and economic expansion. This tax has been a subject of debate lately, as the previous Republican administration cut it by 40% down to 21% in 2018. Indeed, this reduction seems to have benefited investors, as since 2018, the U.S. stock market, particularly the S&P 500, has experienced substantial growth.
Reflecting on my investment journey, if I had put $1000 into the S&P 500 at the start of 2018, it would have grown to around $2197.80 by mid-2024, given that all dividends were reinvested. This translates to a total return of approximately 119.78%, which averages out to about 13.06% per year. This period was marked by significant ups and downs, with the market experiencing a dip during the early 2020 COVID-19 pandemic, only to bounce back strongly afterwards. Interestingly, if I had invested $1000 in Bitcoin on January 1st 2018, that investment would be worth a staggering $4270 today – a whopping increase of 327%. Notably, the proposed 2025 budget by President Biden suggests a rise in the corporate tax rate to 28%.
| Period | US Top Corporate Tax Rate |
|---|---|
| 1950-1951 | 42% |
| 1951-1952 | 50.75% |
| 1952-1963 | 52% |
| 1964 | 50% |
| 1965-1967 | 48% |
| 1968-1969 | 52.8% |
| 1970 | 48% |
| 1971-1978 | 48% |
| 1979-1986 | 46% |
| 1987 | 40% |
| 1988-1992 | 34% |
| 1993-2017 | 35% |
| 2018-present | 21% |
Furthermore, in an effort to stimulate economic growth, Project 2025 proposes reducing the capital gains tax for higher-income earners from 20% to 15%. This would bring the rate back to its level during the majority of the Bush and Obama administrations, between 2003 and 2013.
Other Economic Proposals
Beyond tax reforms, Project 2025 includes several other economic proposals:
- Energy Production: Expanding oil and natural gas production to increase energy security.
- Federal Reserve: Some proposals suggest eliminating the Federal Reserve or diminishing its powers, with others advocating a return to “free banking.”
- Medicare and Medicaid: Transforming Medicaid into a block grant program and making Medicare Advantage the default option for new enrollees.
- Labour Laws: Weaken child labour protections, allowing teens to work in dangerous jobs with parental consent. The plan also proposes changes to overtime laws and additional labour reforms.
- Consumer Protections: Eliminating the Consumer Financial Protection Bureau and potentially the Federal Trade Commission.
- Immigration: Increasing funding for a border wall, restricting visa access, and dismantling the Department of Homeland Security.
Political Reactions and Implications
President Joe Biden and Vice President Kamala Harris have flagged Project 2025 as a major risk to the nation’s economic strength and social advancement. Biden has characterized it as “the most severe assault on our system of government and personal liberties ever proposed in the history of this country.”
Trump has stated that he’s not connected to the plan, asserting no role in its formation and voicing dissent towards some of its proposals. Interestingly, several ex-officials from his administration played a part in designing this blueprint, suggesting a correlation with his administration’s overall objectives.
Conclusion
As an analyst, I find Project 2025 to be a bold and contentious blueprint for America’s future, often perceived as apocalyptic by some. Upon closer examination, however, it is not the imminent catastrophe that some make it out to be. There are indeed elements that push boundaries beyond what many would consider comfortable, but the realization of these plans would necessitate bipartisan legislative backing, which seems unlikely, thus potentially limiting the most extreme alterations. Regardless, if implemented, Project 2025 could exert a deep and lasting influence on our economy and American society at large.
Despite initial criticisms being typical, it’s hard to deny that numerous U.S. federal agencies are ineffective and wasteful. The idea of abolishing the Federal Reserve might garner approval following the economic crisis brought about by COVID-19 and rampant inflation. As the election draws near, discussions surrounding these proposals will likely heat up, as well as the role of cryptocurrency within the U.S. economy, since many are convinced that the existing system is no longer effective.
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2024-08-12 05:21