Experts give reality check on Trump's, Clinton's views on jobs and taxes
Individuals and businesses spend more than 7.6 billion hours annually on tax preparation services,
More jobs. Fairer taxes. Both Donald Trump and Hillary Clinton think they hold the solution to fixing the U.S. economy, but does the campaign rhetoric hold true to reality?
For tax expert Alli Hayes, the winner of the presidential election would do everyone a favor by simplifying the tax code.
"The tax system is overwhelming, not only for the average individual but as you go up the ladder," said Hayes, an associate professor of accounting at North Central College in Naperville.
So onerous is the system, individuals and businesses spend more than 7.6 billion hours annually on tax preparation services, she said.
The situation is worsened by lawmakers who "use the tax code to help direct social and economic objectives," Hayes explained. She cited federal incentives for buying a hybrid car or the recent requirement to provide proof of health insurance.
Both Clinton and Trump promise a tax fix.
Republican nominee Trump proposes a tax cut across the board, from a 30 percent reduction for a married couple with two kids earning under $75,000 with $10,000 child care expenses to a 3 percent reduction for that same family making $5 million or more with $12,000 in child care expenses. He intends to reduce the number of tax brackets from seven to three with rates of 12 percent, 25 percent and 33 percent.
Clinton, the Democratic nominee, wants to increase rates for the very wealthy, ensuring people earning more than $1 million annually pay 30 percent in taxes. She plans to close tax loopholes, such as one allowing financiers to pay a low rate on profits from investments.
The complexity and proliferation of tax breaks puts people at a disadvantage, said Hayes, a certified public accountant. Many college students, for example, are unaware of the credits or deductions available to them. Those who are aware face a perplexing task picking the right one, she said.
Along with tax reforms to fix the economy, Trump and Clinton tout job-creation programs.
However, Boston Federal Reserve President Eric Rosengren told CNBC on Friday that the economy is close to hitting full employment. Illinois' unemployment rate is 5.5 percent, and the national rate is 5 percent.
That's "almost close to the natural rate of unemployment - four percent," Harper College economist Getachew Begashaw said.
Trump promises 25 million jobs in the next decade. He intends to drop the business tax rate from 35 percent to 15 percent. Arguing that federal regulations stifle progress, he wants a moratorium on those that are not safety-related or directed by Congress, such as a 2015 rule defining what rivers and streams fall under government jurisdiction.
Trump vows to renegotiate the North American Free Trade Agreement and says he would impose taxes or tariffs on countries that manipulate their currency, singling out China as a culprit.
Clinton proposes a $10 billion "Make It in America" program that would offer tax incentives to companies that invest in communities hit hard by the loss of manufacturing jobs. It would encourage partnerships between small manufacturers and universities to share knowledge and grow the supply chain.
Clinton also advocates investment in science and green technology, promising to allocate $2 billion a year to find a cure for Alzheimer's disease and to install 500 million solar panels by the end of her first term.
Both candidates say they oppose the Trans-Pacific Partnership trade deal, although Clinton previously supported it.
America's greatest problem is not so much finding jobs as finding skilled employees to work in growing fields, such as green technology and health services, Begashaw said.
"It's about creating a qualified labor force," said Begashaw, noting that Harper has a successful program that lets workers upgrade their skills.
He is skeptical of campaign talk of bringing back America's manufacturing glory days.
"We have lost those jobs," he said. Technology has replaced many factory jobs, while manufacturers "have gradually relocated to where the cost of production is the lowest. It's not about being patriotic or unpatriotic."
Both candidates support penalties to stop outsourcing jobs to other countries, with Trump proposing tariffs and Clinton an "exit tax" on companies.
Begashaw is wary of such tactics, saying "you can't treat outsourcers like enemies of the country."
• Daily Herald news services contributed to this report.