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Morici: Trump Tax Cut, Deregulation Will Spark 3.5 Percent Growth

(AP/Manuel Balce Ceneta)

By    |   Sunday, 29 Jan 2017 09:32 PM

Peter Morici, economist at the University of Maryland, predicts to Newsmax TV that once the dust settles after President Donald Trump’s volatile and controversial first week in the Oval Office, his tax cut plan and deregulation will jump-start economic growth.

“A tax cut plus deregulation will give us 3.5 percent growth. Have to have both together,” said Morici, who is also a Newsmax Finance Insider. 

Morici spoke just hours after the U.S. announced that the economy lost momentum in the final three months of 2016, closing out a year in which growth turned in the weakest performance in five years.

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The gross domestic product grew at an annual rate of just 1.9 percent in the October-December period, a slowdown from 3.5 percent growth in the third quarter, the Commerce Department reported Friday. GDP, the broadest measure of economic health, was held back by a jump in the trade deficit. For 2016, the economy grew 1.6 percent. It was the worst showing since 2011 and down from 2.6 percent growth in 2015.

To be sure Trump has set a goal of doubling growth through an ambitious stimulus program featuring tax cuts, deregulation and higher infrastructure spending.

With many other aspects of Trump’s strategy to be determined, Morici cautioned that the President – and investors – must tread carefully.

“I think border tax adjustment in the context of corporate tax reform would be a good idea if we could structure it in a way that gets through the WTO. Of course it will be appealed, but I think within that, that's fine,” Morici said.

Morici was far from impressed about a possible tariff on imports from Mexico into the United States? “I think it's a terrible idea. I think that right now, Donald Trump is risking losing his mandate, so to speak, by bullying Mexico. If he wants to earn his chops with world leaders, then he's got to do something about China and that's really the big banana. And beating up on Mexico is easy.”

Morici humbly offered his own blueprint which veers totally off the road Trump depicted on the campaign trail.

“My feeling is we ought to dump both the personal income tax and the corporate tax in favor of a value-added tax,”

“That would permit us to have a very simple tax structure, I've written about this, and it would permit us to do something that I wanted so very much to do and that is to close the IRS and relieve American people from keeping track of all those deductions and exemptions and things that they do and reporting to the government every April 15 how they spent the previous year. I find that to be a terrible imposition on my liberty,” Morici said.

To be sure, late last year Morici explained his VAT plan in one of his Newsmax Finance blogs.

"Genuine tax reform—for example, replacing the income tax with a value added tax and providing each adult and child a fixed federal payment to eliminate the spider’s web of entitlements—would fix the problem. No one would be penalized for improving their skills, working harder and smarter and increasing their incomes," Morici wrote.

As his first week in office proves, Trump will be a demanding leader who applies the best of his negotiating skills to push for U.S. growth, as bestselling author David Horowitz recently predicted to TheStreet.com.

Trump won’t be an ideological purist like Republicans who support free trade but don't fight for fair trade, Horowitz said.

“We've had an anti-business president now for eight years who doesn't take a hard-nosed attitude towards these deals. Trump is going to get better deals for us, which is still free trade.”

Horowitz's new book, "The Big Agenda: President Trump's Plan to Save America," reveals Trump's "first 100 days strategy" to roll back Obama's legislative and executive record.

Horowitz's book is the first book about the Trump presidency and has soared to the top of the Amazon bestseller charts, becoming the No.1-selling book on the web.

Trump will also lead the way in making infrastructure spending to boost the U.S. economy, Horowitz said.

"Big Agenda: President Trump's Plan to Save America" is available at bookstores everywhere – or get your copy on Amazon – Click Here Now

“If the economy grows as it will under Trump, there's going to be a lot more money to spend,” he said.

(Newsmax wire services contributed to this report).

Peter Morici is an economist and business professor at the University of Maryland, and a national columnist. He tweets @pmorici1

© 2017 Newsmax Finance. All rights reserved.

   
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Peter Morici predicts to Newsmax TV that once the dust settles after President Donald Trump's volatile and controversial first week in the Oval Office, his tax cut plan and deregulation will jump-start economic growth."A tax cut plus deregulation will give us 3.5 percent growth.
peter morici, donald trump, tax, growth
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Sunday, 29 Jan 2017 09:32 PM
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