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Ifill from terrorism to taxes the candidates duel over their visions of each other. Hillary clinton talked economic policy. And donald trump repeatedly claimed that her failures, in the obama administration,ni allowed a deadly new enemy to emerge. Oh boy, is isis hoping for her. S ifill trump is stepping up s his effort to tie Hillary Clinton time as secretary of state to the rise of the islamic state. E this morning, in miami. You know, if youre a sports team, you have a most valuable player, the m. V. P. Award. Isis will hand her the most valuable player award. Hae ifill and last night in fort lauderdale, with this, about president obama ll isis is honoring president obama. A he is the founder of isis. Hes the founder. He founded isis. De and, i would say the cofounder would be crooked Hillary Clinton. Ifill the republican nominee defended the line of attack, in a callin today to cnbc i t why is there something wrong with saying that . Are people complaining that i said he was the founder of isis . I am wondering how you think thats going to play in some battleground states. I dont know whatever it is it is. Ifill the Clinton Campaign dismissed it all as trash talking, and said it goes without saying that this is a false claim. Hes echoing the talking points of Vladimir Putin and our adversaries to attack americanar leaders and american interests. T meanwhile, clinton ripped into trumps economic policies in a speech outside detroit. She charged hes outright scaree of free trade, and likened it to the olympics if team usa was as fearful as trump, Michael Phelps and simone biles would be cowering in the ocker room afraid to come out to compete. applause instead they are winning gold medals. America isnt afraid to compete. Ifill clinton went on to cite a litany of issues that,th she said, trump remains silent on he has offered no credible plans to address what working families up against today, nothing on Student Loans or the cost of prescription drugs, nothing for farmers or nothing for communities of color in our cities to overcome the barriers for systemic racism, nothing to create newmm opportunities for young people. E ifill but even as clintong surges in the polls, theres new worry for democrats about a cyberattack blamed on russian hackers. The New York Times reports they breached email accounts of more than 100 party officialsnt and groups. Thats on top of hacking of the Democratic National committee, and the partys House Campaign committee. Atco d. N. C. Chair Debbie Wasserman shultz was forced to step down when that news came to light on the eve of the party convention. House Minority Leader Nancy Pelosi addressed the issue in washington today ea russians broke in. Who did they give the info to . I dont know. Who dumped it . I dont know. But i do know this is a watergate like electronic break in. Ifill pelosi said she does not know whether her own emails were targeted. S and its equally unclear what revelations may yet be coming from the hackers. Well turn to the candidates competing proposals on the economy, after the news summary. Woodruff in the days other. News, americanbacked militias claimed new progress in capturing the islamic statesur last stronghold in libya. The militia forces say theyveay now liberated 70 of the city oe sirte. Just a day earlier, they took control of several key sites there, including a sprawling Convention Center that isis fighters had used as a headquarters. Ifill australia is accusing Asylum Seekers of lying aboutf sexual abuse in offshore detention camps. More than 2,000 incidents allegedly happened on the island nation of nauru. But australias immigration minister rejected the accounts today. N i just add a word of caution to some of the hype thats outwo there at the moment. If people have done the wrong thing, whether its security guards, whether its people in our employ directly orir elsewhere, then theres a price to pay for that. But bear in mind that some people do have a motivation to make a false complaint, and we have had instances where people have selfharmed in an effort to get to australia, and im not going to tolerate that behavior either. T ifill australia refuses to accept Asylum Seekers trying to reach its shores by boat. It pays nauru and Papua New Guinea to hold them instead. Woodruff in the philippines, startling numbers today from aom crackdown on drugs. It began under new president rodrigo duterte, as of july 1. Since then, Police Report killing 525 suspected dealers who, they say, put up a fight. In addition, theyve arrested more than 7,600 suspects on charges of drug dealing. And, another half a Million People have turned themselves in to authorities. Human rights advocates are protesting the killings. Ifill back in this country, the u. S. Drug Enforcement Administration balked at re classifying marijuana as a lesser drug. Instead, it stays on the list ot the most dangerous alongside heroin and ecstasy. Theres a growing push to legalize pot. But the d. E. A. Said it still ha. A high potential for abuse. R woodruff the scientists who found lead contamination in flint, michigans water now say the problem has greatlyle improved. A team from Virginia Tech tested 162 homes in july and reported 45 had no detectable levels of lead. That is up from just nine percent with no lead, a year ago. Theyre being implemented by the feds and state andre city ae really working and flints system isots way to recover. Now, that doesnt mean the Current Situation is acceptable. But this process of healing is going to continue. Woodruff for now, however, the researchers say all Flint Residents should continue to drink bottled or filtered watero ifill on wall street, stocks followed Oil Prices Higher aftet an International Report forecast greater stability in the oil market. The Dow Jones Industrial average gained nearly 118 points to close at 18,613. The nasdaq rose close to 24 points, and the s p 500 added 10. Woodruff and, at the summer Olympic Games, americans finished onetwo in the womens gymnastics individual allaround. Simone biles cemented her placem as the best in the world, taking gold, and aly raisman was right behind her to grab silver. Also today, american Kayla Harrison defended her olympic judo title from 2012. Ifill still to come on the newshour, how the president iale candidates tax plans couldid affect your budget. A major setback for Afghan Security forces in Helmand Province. The new normal of slow economic growth, and much more. Woodruff few things are certain in life, and this campaign has certainly defied tradition. But when it comes to taxes, its become clear there are pretty big differences between the two major party candidates. Lisa desjardins reports, part oa our ongoing look at issues shaping the election. Reporter taxes, among the most powerful of government policies, this week became the first headtohead policy speeches between Hillary Clinton and donald trump. Starting with trump, monday. I am proposing an acrossthe board income tax reduction, especially for middleincomeid americans. Reporter trumps plan . He would simplify the tax system to just three, smallerr rates and fewer deductions his top rate would be 33 versu3 the current 39. 6 . We dont yet know who would see which rates. O hes more specific on the estate tax, the tax on inheritances over 5. 4 million. Trump would eliminate that altogether, a benefit for farmers and wealthy families that republicans say is fair and positive. Hillary clinton, in her economic speech in michigan today coulday not have disagreed more. Multimillionaires should not be able to pay a lower tax rate than their secretaries. applause reporter clinton would charge a minimum 30 tax onin incomes over a million dollars, and shed raise the total tax rate to 43. 6 for those making over five million. Clinton would not change rates for the lower or middle class, clinton charges that trumps tax plan is a giveaway to themp wealthy especially one big change. In his speech on monday, he called for a new tax loophole lets call it the trump loophole because it wouldho allow him to pay less than half the current tax rate on income from many of his companies. Reporter clinton is talking about something complicated butg important, called passthrough income. Ss heres how it works, classically, a business pays a 35 rate on taxable incomes. But some businesses, where the owner or family is the business, think about attorneys with their own firms, can pay using whats called a passthrough. In that case the business does not pay a Corporate Tax. T instead the company pays the owner and the owner pays an individual income tax of up to 39. 6 . This exists so the owner isnt taxed twice, as a business and o individual. Donald trumps plan would cut all Corporate Taxes to 15 . And he would set a new 15 rate for these passthrough incomes, a huge cut that could apply to his own businesses. He responds that clinton and democrats overtax companies. All Hillary Clinton has to offer is more of the same more taxes, more regulations, more bureaucrats, more restrictions on American Energy and american production. Reporter different visions trump offering tax cuts to all, especially the wealthy. Clinton pledging to tax the wealthy more and use that money for programs for the middle and lower classes, includingd targeted tax credits. For the pbs newshour, im lisa desjardins. Woodruff clearly there areuf still many other details to both of their plains, but lets focus in on some of the bigger differences of their approaches with neil irwin. He reports on business and Economic Issues for the New York Times. And, david wessel, director of the Hutchins Center on fiscal Monetary Policy at the brookings institution, and a contributing correspondent for the wall street journal. And we welcome both of you back to the program. So i think both of you agree with what weve just been hearing, the biggest differencet between clinton and trump are over how their tax plans treat the wealthy. David, spell that out a little bit more for us. Whats the difference . Er well, Hillary Clinton has a very Clear Strategy of increasing taxes on the wealthye she would increase the estate tax. She would increase the marginalr income tax rate on the highesthe income earners. Trump, on the other hand, would lower taxes for pretty much everybody, but he would disproportionately lower them forrt people at the top and he would do away with the estate tax. In a sense, she wants to use tht tax code toinar oat gap between winners and losers in our economy, and we doesnt make that a priority. He wants to lower taxes and says that that will somehow unleash a burst of economy growth. My woodruff neal, remind us how do we define wealthy here . With Hillary Clinton the biggest surcharge is for people making over 5 million a year. Y thats the very, very wealthy. But she has other provisions that affect people a littletl further down the income scale, some provisions making sure people making over 1 million pay at least 30 . That deals with the issue warren buffet talks about where middleclass people can have a higher rate than people when make their income through capital gains, to shift the burden to the affluent. A woodruff lets talk. What the two of them would do when it comeses to corporationsr and businesses. D and i know theres a lot here, you know, we could focus on. But mainly, what are the differences between the two . The main difference is that donald trump wants toha cut thet tax on businesses, and she does not. Its Pretty Simple like that. She has a number of targeted tax breaks for businesses to encourage them to do things that she and her advisers think would be good for the economy more apprenticeships, more profit sharing. But he is willing to cut the rate, allow them to write off a lot more stuff more quickly. Now, one advantage he has, he doesnt pay for and of this stuff. So shes very carefully, you increase this, you cut that. Shes not making the longtermr deficit better but shes not making it worse. Wo he seems unconcerned with that so he can give a lot more tax breaks. Woodruff so revenue overall to the treasury would go down. A lot. Trillions of dollarss. Woodruff be more specific on that, neil. Lisa referred to something called the passthrough, where if somebody owns a ps again, without confusing everybody what does that effectively meanm its ceend of a big deal. D donald trump talks about doing a 15 rate on business spectacular, not just corporations like apple or g. E. , but on small businessesu including partnerships. Cl if i have a sole proprietorship, he wants apr 15 rate on that income as well. Which means it creates great incentive, if youre a wealthy person looking at 40 rate under the current tax code, you can get that down to 15 if you can somehow route that spectacularac through a business, through a partnership. What well see if that happens is a lot of people trying toee o that. Right, so whats interestingt is if youre a wage earner, if you get a paycheck from your boss, theres no way youre going to be able to take advantage of this. But if you can somehow turn yourself into a little companya a lawyer who say partner, or youre some kind of a baseball player who says, im now imi david wessel incorporated, then i can take advantage of this. So a whole set of people, if they can organize themselves as businesses can take advantage of this. Ordinary wage earners cant. Rs woodruff and is it expected that would happen, neil . It is. The law can try to do things to try to fight it. We already see some of this that happens to avoid payroll taxes. L it is, clearly, one of the issues that will have to be resolved. Woodruff in connectionio with this woo often hear donaldn trump talking about the Corporate Tax rate in this country is way too high. H the effective rate, dade, as i understand it, is lower. Companies end up paying less than what they are charged on paper. The statutory rate, the rate in the law is 35 , but when you look it the all the deductions we give businesses, theth effective rate is lower, in the 20s. For some companies its higher. For some it is lower. There is moment numb washingtonw to redo the Corporate Tax code, take away some of these deductions and credits and lowel the rate. Te its been politically difficult because there are winners and losersd and neither candidate hs gotten specific about how they do that. Woodruff i want to ask you both about the middle class, but before we do, neil, what about the challenges in the estate tax. This is the tax people are charged when they die. How do clinton and trump deal with that . With trump, its simple. S he wants to get rid of it entirely. Right now, the cutoff for a married couple is 10. 9 million. Meaning you have to be a multimillionaire when you die to face that tax at all. He still wants to get rid of it. Hillary clinton wants to reduce the exemptions to 7 million for a married couple so it would affect more people than it does now if Hillary Clinton got her way. Woodruff what would the the effect be on revenue . We dont get a lot of revenue on the estate tax. T we know the direction. I but i think what neil says it really important, of every 1,000 people who die in a given year, only two pay an estate tax. Ta it affects only the very rich. R its more of a talking point. Ng woodruff we hear republicans refer to it as the death tax. Right. Ta i dont, you know, they do thatt woodruff lets talk about, neil, the middle class, and lets be clear about what income bracket were talking about. We see differences between the two of them and what they would do with the tax rate. Donald trump has a middleclass tax cut. Ut its fairly small. Its moving one of the key brackets from 15 to 12 . One estimate, the proposal his is based on would cut aftertax income for middleclass familiem by Something Like 0. 2 , 5 for the richest 1 . He does have that tax cut in there. Hillary doesnt. The question is, is the scale something that will move the dial and change Living Standards for middle class americans and the numbers just ar