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Trump's Tax Plan 'a Great Idea' to Revive 'Engine of Growth'

By    |   Wednesday, 30 September 2015 02:11 PM

Donald Trump' tax plan is "a great idea" because it was finally get the economically struggling nation back on its feet, Tom Hutchinson, the senior financial editor for The High Income Factor Newsletter, told Newsmax TV.

"The engine of growth in this country and the prosperity is from the private sector. By lowering taxes, you shift resources from the government where it's less productive to the private sector," he told "Newsmax Now."

"Every time a major tax cut has been done, not only have we enjoyed more robust growth but it also increases income tax revenues. We're in desperate need of growth and these tax cuts aren't a bad way to get them," Hutchinson said.

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The Trump plan lowers tax rates across the board and breaks the tax code into four brackets, instead of the current seven, CBS MarketWatch explains. Individuals earning less than $25,000 and married couples making less than $50,000 would pay no federal income tax. It would eliminate the alternative minimum tax, the so- called marriage penalty, the estate tax, and the carried interest deduction while keeping the mortgage interest deduction. Trump claimed that the plan could see growth ranging from 3 to 6 percent.

However, according to the left-leaning Center for Tax Justice, Trump's tax proposal would reduce revenues by around $900 billion per year, which would translate to about $9 trillion over a decade.

Hutchinson doesn't agree with the center's analysis.

"This report is basically a hatchet job from an organization who inherently despises lowering tax rates on anybody who isn't poor already," he said.

"The ideas that government is all benevolent and wonderful and all the private sector does is enrich the wealthy, which is nonsense. It provides a robust expansion that benefits the middle class," he said.

"As far as the revenues are concerned, now I don't know how they got this $10 trillion number in this case but I've seen similar examples where they sort of count the same thing twice," he explained.

The Tax Foundation predicts that the billionaire's plan would reduce tax revenue by some $10 trillion over the next 10 years (when measured alongside economic growth).

Turning to Volkswagen, Hutchinson doesn't think we've seen the end.

Volkswagen has imposed a hiring freeze at its financing business and cut a shift at a German engine factory as it braces for a hit to business from cheating in diesel emissions tests, Reuters reported.

Europe's largest carmaker has admitted to using software to rig diesel emissions tests in the United States. Germany's transport minister says it also manipulated tests in Europe, where Volkswagen sells about 40 percent of its vehicles.

It is under huge pressure to get to grips with a crisis that has wiped more than a third off its market value, sent shock waves through the global auto industry and could damage Germany's economy.

"It seems like there's a long road ahead. It looks like it's going to be bad," he said.

"There's estimates of possibly $18 trillion in litigation expenses in the U.S. in addition to $7-$10 billion in recalls and they haven't even started in with Europe yet," he said.

But for investors, there may be a bright side.

"If you bought Volkswagen stock and hung in there for five years, you will probably do really well because it's cheap here but we have a while to go."

(Newsmax wires contributed to this article.)

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TomHutchinson
Donald Trump' tax plan is a great idea because it was finally get the economically struggling nation back on its feet, Tom Hutchinson, the senior financial editor for The High Income Factor Newsletter, told Newsmax TV.
donald trump, tax plan, economy, volkswagen
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2015-11-30
Wednesday, 30 September 2015 02:11 PM
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