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David Stockman: Trump's Tax Plan Is 'Dead on Arrival'

(AP/Kathy Willens)

By    |   Sunday, 30 April 2017 09:28 PM

Former Reagan Budget Director David Stockman warns savvy investors not believe anything they read and are told that President Donald Trump’s tax plan will be the economic cure to truly “Make America Great Again.”

He predicted to CNBC that Trump's promises of tax reform will be "dead before arrival."

"Wall Street is totally misreading Washington," said Stockman, who was the Director of the Office of Management and Budget (1981–1985) under President Ronald Reagan.

The president is "essentially a 70-year old kid in a candy store who wants one of everything: More for defense, veterans, border walls, law enforcement, infrastructure and 'phenomenal' tax cuts, too—without the inconvenience of paying for any of it," said Stockman.

"It's a wonderful fantasy,” he said of Trump’s tax proposal. “But there's no way to pay for the $7.5 trillion cost of the main features," he contended.

"I like [the tax plan] but you have to pay for it either with a new tax like the border adjustment tax, which is dead, or spending cuts which Trump has ruled off the table," Stockman explained. "What you have down there is a total fiscal calamity that is going to basically dominate Washington," said Stockman, who served as a Republican U.S. Representative from the state of Michigan (1977–1981).

Of Trump's first 100 days in office, Stockman again referred to the White House as a "pop up store giving out candy before the 100th day to say they've accomplished something." Adding, "this isn't a serious plan, it can't be done. And I think it's only indicative of the huge trouble that's brewing down there in the beltway," he said.

"I don't know what the stock market is thinking but if they have faith in a giant fiscal stimulus and tax cut then it's a delusional faith that's going to be badly disappointed and I think fairly soon," he added.

However, other respected economic gurus are much more optimistic about Trump's vision for America.

Trump has a victory coming, "a home run," with his tax-reform plan announced this week, but expect some "back and forth" debate as with healthcare, economic pundit and Trump campaign adviser Larry Kudlow said Sunday, per The Hill.

"I can't think of anything better for business, better for wage earners, better for economic growth than Trump's 15 percent tax cut plan," Kudlow told "The Cats Roundtable" on 970 AM-N.Y.

"I think it's a home run."

Kudlow acknowledges there will be still be considerable debate, perhaps even a "struggle," in getting the game-changing reform passed in a stalemated Congress that has blocked everything President Trump has tried to do to date.

"I know there [were] disputes about it, and there were contradictory statements made in recent weeks, but we won," Kudlow told host John Catsimatidis. "And I think Trump – this is a terrific victory for the president. He has set a marker on tax reform and economic growth."

Trump, having failed legislative and executive attempts thus far on healthcare reform, travel bans, and getting funding for the border wall, is not getting resistance just from the left either.

"I think you are going to see continuous – I won't use the word struggle, John – there is going to be a lot of back and forth," Kudlow told Catsimatidis.

Conservative and moderate Republicans have not been on the same page with House Speaker Paul Ryan, R-Wis., and might share skepticism the tax cuts can grow the economy enough to "pay for themselves over time."

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David Stockman warns savvy investors not believe anything they read and are told that President Donald Trump's tax plan will be the economic cure to truly "Make America Great Again."
David Stockman, Trump, Tax, Plan, Dead, Arrival
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2017-28-30
Sunday, 30 April 2017 09:28 PM
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