President Donald Trump’s sweeping tax reform is really a jobs plan because it will put out-of-work Americans on the payroll and promote pay hikes, says Stephen Moore, senior economic adviser to the commander-in-chief's presidential campaign.
"I'm very pleased with it. It cuts the business taxes. It simplifies the system. It's going to bring a lot of jobs back," Moore told Steve Malzberg in a Newsmax interview on Facebook Live.
"In fact, we shouldn't even call this a tax plan. We should call it a jobs plan because that's what it's really about. Jobs and wages for people who haven't had a lot of jobs or wage increases over the last 15 or 20 years."
On Wednesday, Trump proposed dramatic cuts in the taxes paid by corporations in an overhaul his administration says will spur economic growth.
Moore said Trump’s call for a reduction in the corporate tax rate from 35 percent to 15 percent, was something he and another Trump economic adviser, CNBC's Larry Kudlow, had pushed hard for.
"We fought for this throughout the campaign, and Trump thought it was an easy sale on this. He loves the idea … But he said 'I want small businesses to pay that tax rate, too.'
"That's what's so great about this. Twenty-seven million small businesses in this country will also pay a 15 percent rate. That's pretty good.
"Here's the important point. So now it's a 15 percent tax rate, businesses will have more money.
"And if a business has more money after they pay their taxes, a lot of that is going to be plowed back into the business to grow the business," Moore told Malzberg.
"By the way, there's nothing wrong with getting rich. It's called the American dream … There's an interesting report by the Congressional Budget Office. It says 70 percent of the benefit from the business tax cut goes to workers."
He said as companies retain more money, they'll invest more domestically instead of spending overseas.
In addition, Trump's plan for three personal brackets: 10 percent, 25 percent and 35 percent – down from the current seven brackets – will reduce tax loopholes, according to Moore.
"That's what tax reform is. It's getting rid of all the pollution in the back system and all the special interest provisions and try to get the rates down so we have a less punitive system," he said.
"One of the things this plan does is really going to help individuals. It's called the standard deduction … It puts more money into your or my pockets, and everybody's, because you get a bigger deduction.
"But the other thing is the doubling of the standard deduction, [meaning] the vast majority of Americans, I estimate about 90 percent, no longer have to itemize deductions. They just pop the box for the standard deduction and that means you don't have to keep those receipts and all of that. That's a very positive feature."
Under Trump's reform, state and local taxes will no longer be eligible for deductions, but Moore said that change will be fairer for everybody.
"It’s not fair to people who live in Texas and Florida and Tennessee where there's no income tax. Why should they have to pay more tax than the people in California and New York and New Jersey can have big government and high tax rate?" Moore said.
"I very much applaud this. I think it's time to level the playing field but you're going to force states like New Jersey and New York and California to cut their taxes.
"Either you're going to move out of the state of New Jersey or you're going to … tell them to get their rates down."
Moore, co-founder of the Committee to Unleash Prosperity and a senior fellow at The Heritage Foundation, said Senate Republicans are ecstatic about the tax plan.
"I think this is the first time in about a month I really saw Republicans excited because they faced that tough defeat on healthcare reform. We got to get both those things done," he said.
"We've got to get Obamacare repealed and we got to get this tax cut. My only problem with Trump and my only criticism is he should've released this two months ago. We got to get going on this. The economy needs it."
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