Republican hesitation on immediately enacting sweeping tax cuts has stalled the recent stock-market rally, preventing the Dow Jones Industrial Average from cracking the 20,000 milestone, Forbes Media CEO Steve Forbes tells Newsmax TV.
The Dow industrials came within a whisker of the 20,000 milestone, but has since pulled back.
“We're almost there and the reason we haven't gone over is the question now is rising up ‘How hard are the Republicans going to push tax reform?” Forbes told "Newsmax Prime" host J.D. Hayworth on Wednesday.
“The reason the market went up after the election markets always try to anticipate the future,” said Forbes, author of "Reviving America."
“So they're anticipating ‘My gosh, there is going to be good things happening on taxes, good things happening on regulation, good things happening on healthcare, this is great!” said Forbes.
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“So the market prices that in,” he said of the market rally since Trump’s election victory.
“They don't wait for it to happen, they price it in right away. Well now in recent weeks Republicans are starting to make noises. ‘Maybe we shouldn't go for a big tax cut. Maybe we should wait until August. Maybe we should just focus only on healthcare,’” Forbes said of Republican tax-strategy speculation.
“No. You got to do it all. And so this is where Trump will start to set the tone on Jan. 20 with executive orders undoing some of these crazy regulations from EPA and others, given the green light," Forbes explained.
“That'll set the stage for a much higher stock market.”
He also said Trump’s planned business tax cuts will fuel the market rally.
“If you take the corporate tax rate and knock it from 35 down to 15 percent, which Trump has proposed, that increases the S&P earnings almost 20 percent just because you keep more of the money you make,” he said.
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