2017-11-30 18:09:59 UTC
Wednesday, 29 Nov 2017
I am backing President Trump’s efforts for a major tax reduction and reform plan because I think it will create one of the greatest economic booms in history.
Despite serious concerns about some provisions, buried in the Senate and House tax bills is a golden nugget.
The final tax plan won’t be hammered out until the House and Senate each pass their respective bills and send them to the conference committee where the president can truly weigh in.
So far everybody has been talking about the individual and business tax rates, but the true “gift” of the Trump tax plan will be in the proposed special rate for businesses that repatriate money from abroad.
Today, close to $3 trillion in profits sit in the coffers of U.S. company subsidiaries all across the globe. These companies have refused to repatriate these funds because tax rates here are confiscatory — among the highest in the developed world.
Lowering the repatriation tax rate to just 10 percent, as proposed by the Senate plan, will yield tremendous results. Assuming $2.5 trillion is brought back into the U.S. economy, it will serve as the greatest stimulus ever.
Consider that Obama’s stimulus of 2009 amounted to more than $850 billion. This will be almost three times that amount!
This one part of the tax plan will drive the economy for the next 10 years.
Everyone will benefit. And President Trump will see an open path for re-election in 2020. This will happen despite the protestations of CNN, MSNBC, and the elite class.
But there are also poison pills in the tax plans floating through Congress.
Former Bush Ambassador Earle Mack has written in The Hill about the inequities of the individual tax cuts versus the business cuts. For example, the individual tax cuts sunset after 2025. But the business cuts never do. That’s not right.
And Randy Levine, the Yankees president and a long-time supporter of President Trump, warns that a political disaster is looming if the state and local tax deduction (SALT) is not kept.
He’s right that eliminating it would amount to double taxation for many. (See “Mr. President, the Tax Plan Needs a Big Fix!")
And he’s also right that it will lead to political disaster for Trump and the Republicans.
Levine also points out that the “carried interest” tax loophole, which allows hedge fund operators to treat fees on their clients’ investments as capital gains instead of ordinary income and thus enjoy a lower tax rate, remains in the Senate bill.
As I said, the Senate and House should pass the respective bills, warts and all, and move it to the conference committee.
That’s when the president should pounce.
He should keep the big cuts, but also key deductions like SALT and charitable deductions, which could be eliminated for those who don’t itemize.
Thousands of churches and small nonprofits that depend on modest donations will soon find themselves crippled if that key deduction is struck.
President Trump has tremendously good political instincts coupled with powerful negotiating abilities.
Congress loaded a lot of “junk” on what should have been a clean tax reduction bill.
Soon the President will have his moment to get Congress to do the right thing. We need to unite behind President Trump and help him accomplish the mission.
Christopher Ruddy is CEO of Newsmax Media, Inc., one of the country's leading conservative news outlets. Read more Christopher Ruddy Insider articles — Click Here Now.