by Pamela Williams
We need some good news, and we just got it. Following the Labor Department’s release of the March unemployment report, President Trump’s Chief Economic Advisor Gary Cohn said that tax reform is the number one domestic priority for the administration, and Cohn hopes to get it done this year.
“The President is pushing extremely hard on tax cuts and everything we can do to generate economic growth in the United States. The President understands how important deregulation and tax cuts will be for the U.S. economy. He is pushing us all very hard to get that done as soon as we possibly can,” Cohn said during an interview on FOX. This sounds very positive to me, and I believe they will do it. The White House National Economic Council director told FOX that the Trump administration will get a tax reform bill done within the year.
“The most important thing is that we get tax reform done, and we get it done this year. We are working as hard as we can to get tax reform done. It’s the number one priority of mine. The president asks me about it every day. He asks me about it more than every day. He asks me about it every time he sees me, ‘how are we doing on tax reform.’ It is his number one domestic priority right now,” Cohn told host Stuart Varney.
“I tell him exactly what is going on. I am very transparent with him. I tell him where the discussions are, who we are meeting with, what the issues are, what the opportunities are, what decisions are that we are making — and he is actively involved in all of the decisions,” he said.
Wow, I am so glad to report this, and I believe what Cohn says. We will be getting our tax cuts very soon.
I am sure there are some people who do not believe tax cuts will get done anytime soon. One of those people is Rush Limbaugh. He said he was talking to a friend, who was very upset saying he voted for Trump to get his tax cut. But now, he does not see it happening.
Rush told him: But the real reason, folks… (sigh) Look, spending money is the job. That’s what you get to do when you are elected to federal office. In the House, in the Senate, White House, you get to spend the money. And it is your job to spend the money. I can’t tell you the number of senators I’ve spoken to who describe their job to me. I’ve had three of them describe their job to me this way: “I’m in charge of one one-hundredth of the federal budget, Rush.” I said, “What do you mean?” “Well, there’s only a hundred of us, and when the vote comes up, I’m one of a hundred people in the Senate that gets to determine how much is gonna get spent and where.” The tax code… Here’s the real answer to all this: The tax code is the single biggest source of power that elected officials have. They use it for social architecture. They use it to stoke certain areas of our economy and penalize others.
Rush went on to say, and it does not sound good to me, but he does not know everything.
“I’m telling you that Trump may have meant it when he campaigned on them. And the Republicans may have meant it when they campaigned on it, but do you see it? What do you see every time tax cuts are in the news, the news is what? “Well, I don’t know if we’re gonna be able to get through it this year. Well, if we do get to it, we might be able to take it up by August, just in time for the first of three big recesses.”
“My friend doesn’t think we’re getting it. My friend has figured out we’re not gonna get tax cuts, and he’s livid. He’s livid. He believes that tax cuts, in his bracket, is gonna be the fastest way to more disposable income for him. He doesn’t think that he can go out and get a new job or new career that’s gonna pay him demonstrably more than he’s making, and tax cuts… You take the rate from 39% to 36% or 39% to 33%, that can add up, depending on… That can add up to a lot of time money, could be a nice chunk of change. It could equal a pretty good raise or more so, and this guy has been totally planning for it. (interruption) Well, they were gonna reduce the corporate tax to get that down from whatever it is and then try to repatriate some American money held overseas.”
“They were gonna try to do something on the capital gains tax. Trump was even talking about eliminating carried interest, which is the tax that the hedge fund guys love because it allows them to declare earned income as capital gains with a 15% rate instead of 39%. Trump’s talking getting rid of that.”
“ But the point is there isn’t any action on it. I don’t mean to be cynical here, but I’m just telling you. That’s a tremendous power that I have never believed members of Congress are going to willingly sign off on. Now, that is more applicable to the idea of tax reform. I mean, I love this idea of a single rate flat tax, FairTax. That’s what I never see happening, folks. Not unless there’s term limits and you end up with people that are gonna be brand-new in office. It’s too much power. Look at just the home mortgage deduction alone. Look at the power just in that instance.”
“ In fact, there is a story… It’s interesting that I mention that. There’s a story in the Stack today about how home ownership is plunging. Largely it’s because Millennials don’t want to buy houses, supposedly, just like Millennials didn’t want to buy cars — until now they do. This is all gonna change as Millennials age. Remember, Millennials don’t think they’re adults until their 30 now. When they’re 25, they’re still in day care. At 28, they’re still in day care. They’re gonna eventually buy homes. But right now they’re renting because there’s more flexibility and mobility and they don’t have to have a down payment and student loan debt and all that.”
“ So there’s panic on because people aren’t buying homes at a replacement level rate. So the home-building business and the real estate business is under pressure. And the home mortgage deduction, the interest deduction, where do you think that originated? I mean, I’m not talking about when, but it originated because the home industry, real estate or builders’ lobbies were sufficiently powerful enough to convince Congress to allow a tax deduction for interest on mortgages”
“. Do you realize how much that was used to sell houses? The mortgage interest deduction — and really they weren’t selling houses. They were selling monthly payments, and the monthly payment was even made more affordable by deducting the interest. And there have been talks over him the years about removing it and people caterwauled. Just like people had a fit when they did remove, in ’86, the interest on your credit card bill. That used to be deductible too.”
“When that was taken away as part of the ’86 tax reform? I was there, folks. For two weeks we had nothing but rage on the phones on this program. And I tried to tell people, “Do you realize you’re gonna be better off with this? You’re out spending money to get a deduction?”
“But they wanted… People love the idea of deductions. You know why? ‘Cause they think that’s what the rich people do. Rich people get rich by not paying taxes and one of the ways they don’t pay taxes is they get to deduct everything. So if you get to deduct a little bit of your credit card interest, “Yeah, man, I’m screwing somebody.” Same thing with the home mortgage interest. It will never be taken away as long as the realtor lobby and the home builder lobby remains powerful and as long as owning a home is part of the definition of the American dream, the mortgage interest deduction will survive.”
I’m not saying it’s never gonna happen. I’m just saying tax reform, this flat tax, FairTax, single rate, that I won’t believe will happen in my lifetime. I don’t think it’s ever gonna happen because every one of those plans ends deductions. In exchange for the rate, there aren’t any deductions. Well, here came the charities. “You can’t do that. Why, people donate to charities in part for the deduction, and if you’re gonna take that away, our charity’s not gonna survive, it’s gonna be horrible.” And the fair and flat tax people, “A lot of people are gonna be in the same boat, you gotta make it up on your own.”
“The deduction is not that big anyway. It’s too much power. It’s the single greatest power members of Congress and the Senate have. I brought it up many, many years because it is, the social architecture alone, the power to buy votes, the power to shape the culture the way you want it.”
“ Look at Obama taxing medical devices. What do you think that was really all about? Well, it was to kill the medical device industry, but then there was a — remember how — you’ve forgotten this. Remember how certain sexual aids got tossed into that category? Yeah, yeah, yeah. Now, what’s your question? You said you had a question, since I brought this up. What do you mean since I brought this up? What’s the question? Right, Trump’s talking about rebuilding the military, more billions and billions, and infrastructure spending, more billions and billions, and you’re wondering how does tax cuts figure with all that?”
Wow, I am getting an education reading this. I hope you the reader are getting something from it, too.
“Well, again, I still believe that Trump’s infrastructure plan is going to feature funding mechanisms that, while not unique, are funding mechanisms that we haven’t seen in a while? I think this business of using public money with private money is a real idea. And I think Trump can bring it off. I think there are certain people that would be happy to participate in the rebuilding of an airport if there’s equity in it. Rebuilding a bridge if their name’s on it, rebuilding a highway if they get to erect a rest area with a casino in it. Who knows. I haven’t heard of that. I’m just suggesting here that the opportunity for private money participation in this is not something I consider to be out of the realm of possibility.”
But on the business of tax cuts — I just wanted to mention this because my friend is beside himself. He literally thought that was gonna be the first thing Trump did. And I don’t know where Trump is. Trump may indeed want it. I’m just telling you it’s going to be the most difficult thing because it’s the last thing they really want to do. And they can always say, “We can’t take to do tax cuts. Look at the deficit, Rush. Look at the national debt, Rush. Why, they just keep exploding out there. Remember, if we cut taxes over here, we gotta figure out where to pick it up over there. They never do with any less in government.”
“So if they give you a tax cut, they’ve gotta find the money they’re giving back to you from somewhere else in the form of a tax increase or some other fee or what have you. It’s just common sense. Tax cuts are a tough thing because that’s a direct giveaway of an incredible amount of power that elected members of the federal government have.”.
“I did not mean to spend this much time on this, but, as usual, when I get going on things, all avenues are explored. And so that’s that. But that’s the answer on tax cuts. I’m trying to help my friend through this, but I don’t think anything can help him. I mean, he’s literally ready to abandon Trump over this. Ticked off as he can be, despite my supremely logical explanation, it doesn’t help. In fact, I’m making him feel worse.”
“Well, the way you’re talking, it’s never gonna happen.” I’m not saying never gonna happen. Tax reform, flat tax, fair, yeah, maybe not in our lifetimes. Tax cuts, I do believe they’re gonna happen. I just don’t think they’re the priority, and they haven’t been in a while.”
“One thing on the tax cuts, and I think you have to keep something in mind. Remember who’s reporting this. It’s the Drive-By Media. And I think it’s all part of the agenda. Any time the Drive-Bys are reporting there’s not gonna be this element of the Trump agenda any time soon or that element, you need to be very suspicious. You need to dial it back before you believe it and accept it”
“ Look at what Trump’s been doing. Trump has been meeting with business leaders seemingly every week for the last 70 days. They have all asked him, they have all told him they need tax cuts and regulations eliminated. And Trump comes out of these meetings and says so, that he’s gonna do this, and these people in the meetings come out and say it’s best meetings they’ve ever been in, of this kind.”
“ And then Trump administration officials have said that they hope to have this done or at least be started by August, and yet every week there’s a Drive-By Media story that says, “No tax cuts any time soon,” and it’s from the usual nameless sources speaking on the case of anonymity here because they’re not permitted to speak about these things. So I wouldn’t give up yet. Trump’s achievements, particularly in unraveling a lot of Obama administration initiatives, is profound.”
Well, I am glad to see his last statement is positive, and he is right, we have not seen anyone as determined as President Trump. I think he will do his best to make it happen. His Chief Economic Advisor, Gary Cohn seems to be positive about getting it done, too. I believe it will happen…I really do.
by Pamela Williams