Trump turnaround puts new tax-cut writing on the wall
It's not a matter of bean counting. It's a matter of growth-oriented economic policy.
Trump is ending former President Obama's wars on business and success. He's halting the war on fossil fuels. And he's virtually rolling back the regulatory state. The Office of Management and Budget reports that roughly 800 pending regulations have been frozen, rolled back or reclassified in the administration's first seven months.
Slashing the business tax rate is the necessary complement to this regulatory relief.
And GOP lawmakers have 10 weeks to do it.
Can they? Will they?
Here's some progress: It looks like House Speaker Paul Ryan is taking off his Congressional Budget Office green eyeshades. Rather than insist on "revenue-neutral" tax policy, he seems to be returning to his Jack Kemp supply-side roots, arguing that growth is the most important issue.
The CBO is a big part of the swamp that President Trump would drain. With its pathetically small growth estimates, it blocks pro-growth tax-cut policies. Neither the CBO nor the Joint Committee on Taxation has any serious models showing how lower tax rates reduce tax avoidance and tax sheltering -- a point made emphatically by supply-side mentor Arthur Laffer.
But Mnuchin's Treasury will come up with more realistic models for the Trump tax cut. And there's no reason why these estimates couldn't be used.
What's more, there's no reason why the 10-year scorecard window can't be extended to 20 years. The green-eyeshade process must not be permitted to block an American prosperity renaissance.
The GOP needs a budget resolution, which will contain crucial 51-vote reconciliation instructions on spending and taxes. But where there's strong political will, legislative ways and means will be found. Ten weeks is plenty of time.
So I agree with my friends at Bretton Woods Research: Budget and tax-cut draft legislation is coming sooner than folks think. My financial take? Buy stocks, go long the dollar and short gold.
In other words, optimism.
To find out more about Lawrence Kudlow and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate Web page at www.creators.com.Copyright 2017 Creators Syndicate Inc.