Trump is about to make his most important economic speech yet — what to expect

Trump's economic plan coming soon

After a messy week, Donald Trump will turn his focus Monday to economic policy, aiming to assure voters of his chops following months of public inconsistency.

Respondents in recent polls have narrowly picked the Republican billionaire as better prepared to handle the U.S. economy than his Democratic rival Hillary Clinton, even as Clinton expands her national lead in the presidential race. Trump has a chance to nail down his often vague policy stances after recent headlines focused more on his bluster and antics than his solutions.

In his speech to the Detroit Economic Club, Trump is expected to describe more details or tweaks to his proposed broad tax cuts, which some analyses have said could cause the U.S. to lose trillions of dollars over a decade even if they boost growth. He is also slated to contrast his economic vision to Clinton's, seeking to bolster his conservative economic credentials.

"It's going to be a very substantial pro-growth message," said Larry Kudlow, a senior CNBC contributor and informal Trump economic adviser. He hinted Thursday at "significant" personal and business tax cuts and new incentives for businesses to operate in the United States.

Donald Trump, 2016 Republican presidential nominee with Mike Pence, 2016 Republican vice presidential nominee.
Ty Wright | Bloomberg | Getty Images

Trump's speech comes amid mixed signals for the U.S. economy. July job creation of 255,000 positions easily beat expectations, with the unemployment rate holding steady at 4.9 percent and wages growing at an annualized pace of 2.6 percent.

That followed a disappointing second-quarter gross domestic product reading, which showed GDP grew at only a 1.2 percent annual rate. Trump has repeatedly painted a bleaker picture of the U.S. economy than even the weaker data reflect.

Trump, who unveiled an economic policy team Friday comprised of mostly investors and businessmen rather than economists, previously outlined some tax reform details. Trump has previously proved inconsistent on these proposals, like when he said his position on cutting taxes for the rich is flexible.

Here are Trump's tax proposals as they currently stand, according to his campaign's website:

  • Trump would set the highest income tax bracket at a rate of 25 percent, with no income taxes on single filers making less than $25,000 or families making less than $50,000. The other two brackets would be taxed at a 10 and 20 percent rate, respectively. The top income tax rate is projected at 39.6 percent for 2016, according to the Internal Revenue Service.
  • Businesses of all sizes would not pay more than 15 percent of their income in taxes. The Trump campaign also currently proposes a "discounted" 10 percent one-time tax repatriation of corporate money held overseas.
  • Trump pledges to cut deductions and loopholes for the "very rich," as well as "corporate loopholes that cater to special interests."
  • The campaign claims cutting those reductions or loopholes would make the plan "revenue neutral," but analyses have disputed that.

"The corporate business side of this plan is going to be so important ... this is going to create new incentives so that American companies stay home," Kudlow said, adding that he expects more foreign companies to move cash to the U.S. under Trump's plans.

Kudlow also said Trump could discuss his plans on energy and health care on Monday. Trump has previously pledged to reverse environmental restrictions on coal issued under President Barack Obama while boosting domestic natural gas production through hydraulic fracturing.

He also said he wants to repeal and replace the Affordable Care Act and replace it with a new system. Trump's reforms could include allowing people to buy insurance from any state and making insurance premiums deductible.

The billionaire Trump has also previously pledged to dismantle the Dodd-Frank Wall Street reforms. He wants to put resources into a wall on the U.S.-Mexican border as well as deport many undocumented immigrants, which could cost in the tens of billions of dollars.

Many policies Trump is expected to detail clearly contrast those Clinton has supported. Clinton wants people making more than $1 million per year to pay an effective tax rate of at least 30 percent.

She has called for a 4 percent "fair share surcharge" on taxpayers making more than $5 million per year. And like Trump, Clinton wants to cut loopholes used by the rich.

Her campaign claims those measures and others would raise $400 billion to $500 billion in revenue over 10 years to invest in American businesses and infrastructure.

The Democratic Party platform also calls for a $15 minimum wage, another policy on which Trump has given conflicting statements.