Pitches Tax Breaks

Trump Pitches Tax Breaks Amid Speech Interruptions

By Nick Timiraos

Republican presidential nominee Donald Trump on Monday outlined a proposal to allow families to deduct child-care spending from their income taxes as part of a broader effort to slash taxes.

It wasn’t clear how such a tax break might be structured and whether it would be available to tens of millions of families that don’t pay income taxes because they have lower incomes. Making child-care expenses fully deductible would provide much larger benefits to the wealthiest families that have larger tax bills.

Mr. Trump read his speech off teleprompters, which he has repeatedly mocked as tools of phony politicians even though he has used them previously for major speeches. He was interrupted numerous times by protesters, and in the more sterile confines of the Detroit Economic Club, lacked the bevy of supporters at his outdoor rallies who drown out dissenters with chants of “USA! USA! USA!”

So far, Mr. Trump’s economic-policy message has focused primarily on placing greater curbs on trade and immigration, coupled with a large tax cut. The campaign’s economic message has promised to boost job growth, but it has included fewer appeals to voters on pocketbook issues such as child care and college tuition—a focus of Democratic rival Hillary Clinton.

More broadly, Mr. Trump’s speech attempted to cast Mrs. Clinton’s economic appeal as too dependent on government regulation and wealth redistribution. Still, Mr. Trump over the past week has embraced a signature plank of Mrs. Clinton’s proposal by promising twice as much infrastructure spending as the Democratic nominee.

His Monday speech is aimed at getting his campaign back on track, as national polls and surveys of some battleground states show him losing ground against Mrs. Clinton.

Last week, Mr. Trump faced a hailstorm from fellow Republicans for questioning the motives of the parents of a Muslim soldier killed in Iraq who appeared at the Democratic convention and for initially balking at endorsing the re-elections of three top Republican lawmakers. Mr. Trump came around to backing House Speaker Paul Ryan, Arizona Sen. John McCain and New Hampshire Sen. Kelly Ayotte on Friday and has been stressing party unity in recent days.

Mr. Trump also called for a temporary moratorium on all new regulations from federal agencies and would seek to roll back rules that reduce employment. A campaign adviser said that review could target a series of environmental rules issued by the Environmental Protection Agency to curb carbon-dioxide emissions from power plants and to bring more waterways and wetlands under federal protection.

It isn’t clear how such a moratorium would apply to financial regulators, whose agencies enjoy greater independence from the executive branch.

At the same time, Mr. Trump has promised to aggressively use executive power to renegotiate trade agreements, to label foreign countries as currency manipulators and to apply tariffs and other penalties to trading partners.

Monday’s speech continues his newly trained focus on lines of attack against Mrs. Clinton that many Republicans have been pushing. Mr. Trump chose a state that hasn’t voted for the Republican presidential nominee since 1988 to emphasize his economic platform.

A recent EPIC-MRA poll found Democratic nominee Hillary Clinton leading Mr. Trump by 11 points in Michigan. The survey included Libertarian Gary Johnson, who received 8%, and Green Party nominee Jill Stein, who got 3%.

Mr. Trump’s campaign has identified Michigan as a target because it believes his populist message will resonate with the Rust Belt state’s blue-collar workers.

Mr. Trump recently announced an all-male economic advisory team of wealthy real estate and private-equity executives that drew criticism for lacking the economic-policy experts who traditionally advise candidates.

Informal advisers to Mr. Trump have for weeks said the nominee would unveil a revamped tax-cut proposal. One campaign official said Mr. Trump’s tax plan would now include just three income-tax brackets, instead of four.

The earlier proposal, released last September, would sharply lower income-tax rates on individuals and businesses. The Tax Policy Center, a nonpartisan project of the Urban Institute and Brookings Institution, has said the plan would reduce federal revenue by $9.5 trillion over a decade, making it far larger than the tax cuts enacted last decade by President George W. Bush.

The GOP nominee has also called for a big increase in infrastructure spending that would be financed by taking on new debt, but he hasn’t fleshed out details of that plan.

Budget experts say that even with a boost in economic growth, the combination of higher government spending on infrastructure—as well as other priorities that include a veterans’ health-care expansion and a ramp-up in border security—and large tax cuts could send deficits soaring.

The focus on child-care costs is relatively new for Mr. Trump. The federal tax code has long provided two primary means for families to receive breaks for child-care costs—a dependent-care spending account that allows workers to put aside as much as $5,000 in pretax income and a dependent-care tax credit. President Barack Obama last year proposed to triple the maximum credit to $3,000 per child.