Tags: forbes | tax | cut | reagan

Steve Forbes: Reagan-Style Tax Cut Now

By    |   Wednesday, 08 Oct 2008 10:48 AM

Steve Forbes, editor in chief of Forbes magazine, said this morning that while the Fed’s emergency rate cut was a help, its effect would be “short term.”

Instead, the market needs a huge, Reagan-style tax cut immediately.

“The danger in a situation like this, what we saw first in the 1930s and in the 1970s, when you have a crisis, it’s often the aftermath of the crisis, and what they do, that makes the problem worse,” Forbes said on CNBC.

“It was the Roosevelt-Hoover policies that were a disaster in the ‘30s, inflationary, pro-tax policies in the ‘70s, that turned that decade into a decade of stagnation, and Reagan reversed it.”

The markets are unlikely to budge much on the Fed’s 50-basis point drop to 1.50 percent, Forbes suggested. “We’ve been playing this card for a year,” he said.

Instead, the government should scrap the mark-to-market accounting rule, immediately begin disbursing the $700 billion bailout money, and make a strong statement in support of the U.S. dollar.

The credit crisis, Forbes maintains, is the direct result of the weak-dollar policy of the government, the behavior of Fannie Mae and Freddie Mac in home lending over years, and mark-to-market rules that forced companies to recognize paper losses on assets and make them whole in real time.

Such policies, “destroyed companies like AIG, destroyed Lehman. Neither one of them should have gone down,” Forbes said.

“If you had that kind of policies in the early 1990s, Citigroup and every other major commercial bank in this country would have gone down, we would have had a great depression in the early 1990s.”

Speaking of the credit crisis, Forbes said: “This thing is now 14 months old, when it should have been 14 weeks,” Forbes said.

Former Congressman Jack Kemp, writing in The Wall Street Journal, lays out a new version of Forbes’s longstanding call for a “flat tax” on income.

Under the plan, there would be just two tax rates, 10 percent and 25 percent, and Americans would choose between them. The higher would allow deductions, and the lower rate would not.

“John McCain needs to show the nation that he has the economic recovery plan to restore long-term economic growth. To do that, he needs to refocus his campaign with a new tax plan. Mr. McCain should come out for an alternative, optional flatter tax system, which he has already supported,” Kemp says.

© 2017 Newsmax. All rights reserved.

   
1Like our page
2Share
StreetTalk
Steve Forbes, editor in chief of Forbes magazine, said this morning that while the Fed’s emergency rate cut was a help, its effect would be “short term.”Instead, the market needs a huge, Reagan-style tax cut immediately.“The danger in a situation like this, what we saw...
forbes,tax,cut,reagan
401
2008-48-08
Wednesday, 08 Oct 2008 10:48 AM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved