In an economic speech in Detroit on August 11, 2016, Democratic presidential nominee Hillary Clinton called Donald Trump's proposed 15% tax rate on pass-through entities the "Trump loophole" and said it would allow him to pay less than half the current tax rate on income from many of his companies, and a lower rate than millions of middle-class families. She also said there are better ways to spend money than the estate tax repeal called for by Trump that would primarily benefit wealthy families.

The speech served as a rebuttal to the Republican nominee's August 8 speech, also in Detroit, during which Trump highlighted his proposed 15% business income tax rate within the personal income tax system for pass-through entities, to match the 15% corporate income tax rate he is also proposing. Also on Monday, Trump moved his tax proposal closer to the Blueprint released by House Republicans June 24, embracing individual income tax rates of 12%, 25%, and 33%, as well as immediate expensing for new business investments.

Asked on CNBC this morning about the potential for wealthy individuals to "funnel their earnings" through pass-through entities to pay the 15% tax rate, Trump said that he would have additional details within two weeks and may call for ending many of the "loopholes" that are currently being used. When asked whether it was fair to say he would take steps to prevent individuals from benefiting from the pass-through entity tax rate, Trump said, "We are looking at that very strongly. It's going to be reported on within two weeks."

During her speech, Clinton largely highlighted previously stated tax positions rather than announcing new proposals. Clinton said it is a myth that Trump will act to "stick it to the rich and powerful," and said his economic proposals would result in a giveaway of trillions of dollars that would explode massive debt and eventually lead to cuts in health care and education. She promised that she would be the candidate to ensure that "those at the top pay their fair share of taxes," including through: the "Buffett Rule" proposal that calls for an effective tax rate of 30% on those making more than $1 million per year; a new tax on multimillionaires; and eliminating the preferential tax treatment of carried interest.

She called for a "more progressive, more patriotic tax code that puts American jobs first," including by: ending the ability of corporations to write off the cost of outsourcing of jobs and production; clawing back the US tax benefits received by outsourcing companies; and establishing an exit tax for inverting companies. More generally, she also called for cracking down on "tax gaming by corporations," and dramatically simplifying tax filing by small businesses.

Clean energy technologies should be produced, utilized, and exported by the United States, she said, and an infrastructure bank should be created to get private funds off the sidelines. Clinton said she would work with both parties to make the biggest investment in good-paying jobs since World War II by putting Americans to work building and modernizing roads, bridges, railways, ports, and airports. "We are way overdue for this," she said. Clinton has called for increasing infrastructure funding by $275 billion over a five-year period, fully paid for through business tax reform, but has not provided reform details.

An adviser to Hillary Clinton, Neera Tanden, who is President and CEO of the Center for American Progress, recently expressed some skepticism that a corporate rate cut would be part of any such plan. Asked July 27 whether Clinton would support a cut in the context of an infrastructure spending deal, Tanden said "it's a little bit hard to argue that we're uncompetitive when profitability of firms has done pretty well over the last several years," Politico reported.

Clinton also promoted her proposal to limit the cost of child care to 10% of family income and derided Trump's proposal, announced on August 8, to make the average cost of child care expenses fully deductible as more advantageous to the wealthy.

Meanwhile, on August 10, David Kamin, an adviser to Hillary Clinton, issued a report through the Washington Center for Equitable Growth that proposes reforms to the taxation of capital, including taxing capital gains on a mark-to-market basis, at least when it comes to publicly-traded assets, and charging asset holders for the benefit of deferring gains on property. The report, "Taxing capital: Paths to a fairer and broader U.S. tax system," calls for other reforms that include changing how the location of profits is determined by switching from a system focused on the "source" of the product or service that generates profits to the "destination" of the product or service.

Kamin, a former special assistant for economic policy to President Obama now a professor at the NYU School of Law, clarified to Politico that he was not speaking for the Clinton campaign, only as an independent academic analyst.

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Clinton speech