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Trump Turnaround Puts New Tax-Cut Writing on the Wall
Townhall.com ^ | September 16, 2017 | Larry Kudlow

Posted on 09/16/2017 10:45:00 AM PDT by Kaslin

Financial markets and most media pundits are missing the new writing on the wall. For a variety of reasons surrounding shrewd moves by President Trump, the chances for significant tax cuts in the next ten weeks have risen sharply.

Since the Charlottesville blow-up in mid August, when the president’s fortunes were at low ebb -- and I’ll repeat my view that there’s not a white-supremacist, racist, hateful bone in Trump’s body -- we’ve witnessed a dramatic executive turnaround. Trump beautifully handled the hurricane emergencies. His bipartisan political pivot to “Charlie and Nancy” to keep the government open and raise the debt ceiling was clever indeed. As economist Steve Moore puts it, POTUS publicly spanked GOP leaders Paul Ryan and Mitch McConnell. And though there’s plenty of confusion about immigration reform, it’s clear now that 800,000 dreamers won’t be deported for at least two years if ever.

Some polls show POTUS’s approval nearing 50 percent. The public likes what it sees.

And most important, Trump has cleared the decks for tax cuts and reform.

Make no mistake: Trump is absolutely committed to tax cuts. This is completely unlike the health-care muddle. And critical here is the argument Trump is making: A big drop in large- and small-business tax rates will mostly benefit middle-class wage earners.

Research from Kevin Hassett, formerly of AEI and now chairman of the CEA, shows about 70 percent of the benefits of business tax cuts going to wage earners. This is not a tax cut for the rich, as Johnny-one-note Democrats insist.

There are two big numbers standing atop Trump’s tax plan: 3 percent and 15 percent. Three percent is the new growth path that will normalize America’s economy and generate at least $3 trillion of additional revenues over ten years (or sooner). This is the mother of all pay-fors. Fifteen percent is the corporate rate that will spur capital-formation, business-investment, productivity, and real-wage increases.

The Republican establishment says it can’t be done. They’ll only risk dropping the business rate from 35 to 25 percent. But Trump wants the full 15. So does his Treasury secretary, Steven Mnuchin. Other than the president, Mnuchin, whom I call the “apostle of growth,” is the only administration official to keep up the drum beat for 3 and 15 percent.

Aparna Mathur of AEI notes that at 39.1 percent, including state taxes, the U.S. has the highest statutory rate among G20 nations. (China is 15 percent.) And our average corporate rate, which is total taxes paid as a share of income, is 29 percent, third highest in the G20.

So echoing the president, if we want to build out investment, jobs, and wages, bring back overseas profits, stop American companies from going overseas, and make the investment climate in America tops in the world, we need a big-bang slash of our business tax rate.

It’s not a matter of bean counting. It’s a matter of growth-oriented economic policy.

Trump is ending Obama’s wars on business and success. He’s halting the war on fossil fuels. And he’s virtually rolling back the regulatory state. OMB reports that roughly 800 pending business regulations have either been frozen, rolled back, or reclassified in the administration’s first seven months.

Slashing the business tax rate is the necessary complement to this regulatory relief.

And GOP lawmakers have ten weeks to do it.

Can they? Will they?

Here’s some progress: It looks like Paul Ryan is taking off his CBO green eyeshades. Rather than insist on “revenue neutral” tax policy, he seems to be returning to his Jack Kemp, supply-side roots, arguing that growth is the most important issue.

The CBO is a big part of the swamp that President Trump would drain. With its pathetically small growth estimates, it blocks pro-growth tax-cut policies. Neither CBO nor the Joint Tax Committee has any serious models showing how lower tax rates reduce tax-avoidance and tax-sheltering -- a point made emphatically by supply-side mentor Arthur Laffer.

But Mnuchin’s Treasury will come up with more realistic models for the Trump tax cut. And there’s no reason why these estimates can’t be used.

What’s more, there’s no reason why the ten-year scorecard window can’t be extended to 20 years. The green-eyeshade process must not be permitted to block an American prosperity renaissance.

The GOP needs a budget resolution, which will contain crucial, 51-vote reconciliation instructions on spending and taxes. But where there’s strong political will, legislative ways and means will be found. Ten weeks is plenty of time.

So I agree with my friends at Bretton Woods Research: Budget and tax-cut draft legislation is coming sooner than folks think. My financial take? Buy stocks, go long the dollar, and short gold.

In other words, optimism.


TOPICS: Culture/Society; Editorial; Front Page News; Government; News/Current Events; Politics/Elections
KEYWORDS: economy; presidenttrump; taxes; taxreform; trump; trumpadministration; trumptaxcuts; trumptaxes; trumptaxreform
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1 posted on 09/16/2017 10:45:00 AM PDT by Kaslin
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To: Kaslin

There are a lot of worry-warts around here lately, but I think President Trump is doing great. Things take time, and the hill is steep, but he’ll do it.


2 posted on 09/16/2017 10:49:50 AM PDT by ClearCase_guy (Benedict McCain is the worst traitor ever to wear the uniform of the US military.)
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To: Kaslin
Ben Garrison's Latest Effort


3 posted on 09/16/2017 10:55:17 AM PDT by Fiddlstix (Warning! This Is A Subliminal Tagline! Read it at your own risk!(Presented by TagLines R US))
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To: ClearCase_guy

Everything is proceeding nicely.

I also agree we have seen a fair amount concern trolls recently. Mostly newer accounts or older neocons. They refuse to accept the paradigm shift. They still don’t realize the press, with very few exceptions, is the enemy.


4 posted on 09/16/2017 10:57:49 AM PDT by PJammers (Quis custodiet ipsos custodes?)
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To: Kaslin

Nice article and nothing about the ‘Dreamers’ who’ll flip Texas and Florida socialist if they’re allowed naturalization and subsequent chain immigration.


5 posted on 09/16/2017 11:06:09 AM PDT by MSF BU (Support the troops: Join Them.)
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To: ClearCase_guy

There are a lot of worry-warts around here lately, but I think President Trump is doing great. Things take time, and the hill is steep, but he’ll do it.

My thoughts exactly........well said.........;)


6 posted on 09/16/2017 11:06:23 AM PDT by Dawgreg (Happiness is not having what you want, but wanting what you have.)
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To: Fiddlstix

Love it!


7 posted on 09/16/2017 11:08:36 AM PDT by Dawgreg (Happiness is not having what you want, but wanting what you have.)
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“We will immediately terminate President Obama’s two illegal executive amnesties, in which he defied federal law and the constitution to give amnesty to approximately 5 million illegal immigrants.” DJT -August 31, 2016


8 posted on 09/16/2017 11:08:48 AM PDT by proust (Since a politician never believes what he says, he is quite surprised to be taken at his word.)
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To: PJammers

All of the trolls concerns are based on conjecture and fear. It ain’t over til it’s over and we are in the early part of the game.


9 posted on 09/16/2017 11:13:40 AM PDT by bigbob (People say believe half of what you see son and none of what you hear - M. Gaye)
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To: Kaslin

Larry Kudlow is a fav. Occasionally he strays, but this time he’s right on target.


10 posted on 09/16/2017 11:29:29 AM PDT by upchuck (I speak my mind because it hurts to keep biting my tongue all the time.)
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To: Kaslin

Excellent article.

Mnuchin and Trump are holding firm on corporate tax cuts to 15% vs. the current 40% tax rate on business (including confiscatory State taxes).

The kerfuffle re: DACA may have helped take focus off progress Trump is making toward getting a signed tax cut bill by year’s end. This writer says “10 weeks”. If true, I will bet Trump wins on this one which means all these loser Republican incumbents will win reelection next year; but first they have to gird their loins to withstand the namecalling and attempts to blackmail by the Dem stasi. Reelection for sure if they stand pat. Or resign when their little secrets are revealed. Hmmm.


11 posted on 09/16/2017 11:32:30 AM PDT by The Westerner (Protect the most vulnerable: get the government out of medicine and education and the forests!)
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To: MSF BU

The article wasn’t about DACA. Why would it be mentioned?


12 posted on 09/16/2017 11:37:14 AM PDT by PJammers (Quis custodiet ipsos custodes?)
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To: proust

The article was about taxes. What is your point for being off topic?


13 posted on 09/16/2017 11:38:34 AM PDT by PJammers (Quis custodiet ipsos custodes?)
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To: Fiddlstix

The Garrison political cartoons are amazing.

This one makes it clear he’s got his head in the game, all the topics he covers. As busy as it is, it’s hard to believe, but there is even more that could have gone on it, a lot more.

Kudos to him for this effort.

Thanks for posting it here. I saved a copy. Really nice...


14 posted on 09/16/2017 11:42:39 AM PDT by DoughtyOne (DACA: Their dream, our nightmare... will the rule of law prevail or not?)
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To: DoughtyOne

His work reminds me a lot of Thomas Nast. It’s just that thickly textured.


15 posted on 09/16/2017 11:43:25 AM PDT by Publius ("Who is John Galt?" by Billthedrill and Publius available at Amazon.)
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To: Publius
The name was unknown to me so I looked up some of his work.

This seemed to reflect your point pretty well.

Thank you. I agree.


16 posted on 09/16/2017 11:50:31 AM PDT by DoughtyOne (DACA: Their dream, our nightmare... will the rule of law prevail or not?)
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To: Kaslin

“Trump Turnaround Puts New Tax-Cut Writing on the Wall”

what “turnaround”? how can there be a “turnaround” when there was never a REAL issue to begin with?

this “low ebb”/”turnaround” BS is total nonsense because all of these putative Trump tidal levels are simply fabrications by the enemedia, which no one but die-hard leftist pay the slightest bit of attention to the enemedia anymore as evidenced by the recent poll showing 98% of Pubs who voted for Trump in both a primary and the general election still support him.


17 posted on 09/16/2017 12:07:39 PM PDT by catnipman ( Cat Nipman: Vote Republican in 2012 and only be called racist one more time!)
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To: Kaslin

Financial markets ...are missing the new writing on the wall


Take another look at the DOW, Larry, then get back to me.


18 posted on 09/16/2017 12:22:44 PM PDT by sparklite2 (I'm less interested in the rights I have than the liberties I can take.)
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To: Kaslin
Can they? Will they?

No.

19 posted on 09/16/2017 12:32:06 PM PDT by DoodleDawg
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To: DoughtyOne; All; FReepers
Just check his website every couple of days: https://grrrgraphics.com/
for his latest. He's very prolific

https://grrrgraphics.com/

20 posted on 09/16/2017 12:44:57 PM PDT by Fiddlstix (Warning! This Is A Subliminal Tagline! Read it at your own risk!(Presented by TagLines R US))
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