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Trump clarifies tax plans for business and middle class

On Wednesday, President Trump made a virtual address to the Economic Club of New York where he spoke about his thoughts on the U.S. economic and job recovery, as well revealed new details on his tax plans for both the middle class and business. Yahoo Finance’s Rick Newman joins The Final Round to discuss the details of the President Trump’s speech.

Video Transcript

SEANA SMITH: Welcome back to "The Final Round" here on Yahoo Finance. President Trump was speaking to the Economic Club of New York earlier today. And one of the promises that he made is that he is now vowing to cut business taxes if he gets re-elected.

Rick Newman, it seems like President Trump is doing all he can to get votes at this point. Of course, the big question is whether or not this is going to help his re-election. What do you think?

RICK NEWMAN: I guess the question is whether he has any credibility left with people who would care about getting another business tax, who don't approve of his handling of the coronavirus crisis and many other things.

So this event today, he read from a teleprompter, standing at a podium in the Rose Garden outside. So it was a formal address, you know, in the usual on screen format we're used to.

But then he took some questions at the end. And someone just asked a question about his second term, what he would do in a second term. And he said we're going to cut taxes for businesses and for middle class families.

So he has said a bunch of times, he wants to cut taxes for middle class families by some more. But to my ear, this is the first time he said he would go for another business tax cut. And it's hard to imagine how he would do that. You know, the 27 tax cuts he signed into law are already unpopular because people feel like they cut taxes too much for businesses and the wealthy, and too little for the middle class.

So as a populist move, it does make sense to promise more middle class tax cuts. But I'm not sure it would help him to promise more business tax cuts. But he said it today. It was in response to a question. So who knows how much thought went into that and whether it's an actual proposal or just something that popped into his head?

ANDY SERWER: Then there's the question of how he would pay for it, Rick. And I have a pretty good idea of how he would, which is to raise taxes on people who live in blue states. What do you think?

RICK NEWMAN: Well, they did that already by putting the limit on the SALT-- the state and local tax deductions. But, you know, they really did not pay for much of the 2017 tax cut. And the federal deficit began to rise after those tax cuts because there was less tax revenue coming in. So he didn't really pay for those.

And he has not proposed any way to pay for these other tax cuts. By the way, the so-called middle class tax cut he wants is a cut in the payroll tax. And the payroll tax is what funds Social Security and Medicare. So when you look into the details on that one, that's not likely to be popular either.

SEANA SMITH: And Rick, it's also interesting because in addition to these tax cuts, he also mentioned his foreign policy, and just, he reiterated what he has said in the past. And that's just the fact that he's claiming that Joe Biden is not going to take China to task for its mishandling of the pandemic. He's not going to have the same approach as President Trump. I think that is pretty clear.

But I'm just curious just how he's doing on that in the polls, just in terms of where President Trump stands in the polls with his approach to foreign policy at this point.

RICK NEWMAN: He's doing poorly on just about everything in the polls. I mean, the one place where he's now-- I mean, the best I think he can say that he's even with Biden is on the economy. You know, foreign policy is not something-- it's not typically a top three voter concern.

I think maybe you could argue that Trump broke through that a little bit in 2016 by Trump-- by promising better trade deals. But he has not really delivered. In fact, we have a higher overall trade deficit now than we did in 2016. So that's the measure Trump used in 2016 to say how bad off we were. And if you use the same measure now, you'd have to say we're worse off.

So, look, President Trump is in trouble. And his main kind of talking point at this point is that Joe Biden is a reckless socialist who's going to cause a depression. I think polls indicate voters aren't really buying that, which really raises the whole issue of a credibility problem for Trump.