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Ron Insana: Trump, GOP Tax Cuts Just Might Be Waste of Money

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Tuesday, 22 August 2017 03:17 PM

Market guru Ron Insana says while tax reform is a great idea, tax cuts just might be a waste of money.

He warns that although “comprehensive” tax reform is a major Trump administration priority, internal GOP divisions might kill the intention to totally redesign the tax code.

“By comprehensive tax reform, I mean the lowering of rates; the elimination of tax loopholes, both personal and corporate; a territorial tax system for multinationals doing business overseas, and further tax incentives for individuals to save and invest,” Insana wrote for CNBC.com.

“It's not just that President Trump has been hobbled by a variety of self-inflicted wounds that will likely delay or destroy the chances of such a deal, but the internal divisions among the GOP may also simply kill reform in its ideological crib,” the CNBC and MSNBC contributor wrote.

“Overhauling the nation's insanely complex tax code remains a good idea, assuming it accomplishes the goals of comprehensive reform: simplification, lower rates and a broader base of taxpaying individuals and corporations,” he said.

“We have other problems restraining growth and investment, not the least of which is subpar productivity growth. Tax cuts won't fix that, but other investments might,” Insana said.

“Simply cutting taxes could be a relatively easy, feel-good fix. But it won't help the economy in the long run, nor will it deliver benefits to those who need them most,” the author of four books on Wall Street explained.

“Taxes are not what ails the U.S. economy. Nor is insufficient demand from consumers,” he said.

He says corporations are already paying an 18 percent rate and are sitting on excess cash. Tax cuts would probably go to more share buybacks and dividend hikes.

“And while the cash is good for shareholders, it fails to benefit the middle class that President Trump promised to help,” he said.

"We don't need lower taxes to generate even lower unemployment. We need a growing population (read: comprehensive immigration reform and fewer barriers to enter the U.S.) and increasing productivity for the economy to reach its fullest employment potential," he said.

Meanwhile, Treasury Secretary Steve Mnuchin on Monday vowed that the Trump administration is "100 percent committed" to getting tax reform done.

Republican lawmakers have also insisted they will make tax reform a priority, even though they are facing deadlines to increase the debt ceiling and pass a budget in September.

To be sure, Trump wants to close a frustrating 2017 with the first overhaul of the tax code in more than three decades.

Yet after seven months of work, Trump's plan remains little more than a rough sketch. Despite the haziness of the blueprint, administration officials have held to their pledges that lowering tax rates would spur the creation of millions of jobs and faster economic growth, the Associated Press reported.

The White House maintains that the House and Senate will begin considering a detailed tax overhaul after the August recess with final passage scheduled for November. But after the Republican drive to repeal the 2010 health care law collapsed this summer, Senate Majority Leader Mitch McConnell declared that the president had "excessive expectations about how quickly things happen in the democratic process."

(Newsmax wires services contributed to this report).

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Market guru Ron Insana says while tax reform is a great idea, tax cuts just might be a waste of money.He warns that although "comprehensive" tax reform is a major Trump administration priority, internal GOP divisions might kill the intention to totally redesign the tax...
ron, insana, tax, cuts, reform, trump, gop
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2017-17-22
Tuesday, 22 August 2017 03:17 PM
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