President Donald Trump officially announced his tax plan last week, and he will need some powerful allies in the legislature if he hopes to get it passed. He already has one in Kentucky Sen. Rand Paul, who will put his conservative bonafides behind Trump’s initiative.
“I like it because it’s bold. I like it because it cuts taxes and it doesn’t play games and say we’re going to shift taxes around and it’s going to be revenue neutral. It does cut taxes. It take less money. It sends less money to the federal government. I say, if you want to defeat the beast, you’ve got to starve the beast. That means don’t send more money to Washington,” Paul said on a Pennsylvania talk radio program last week in favor of Trump’s tax plan.
Last week, Trump offered a general outline of his upcoming tax plan with more specific details to be released later. Trump aims to cut the top rate of individuals from 39.6 percent to 35 percent, and the business tax rate down to 15 percent. Treasury Secretary Steven Mnunchin boasted that Trump will be offering “the biggest tax cut and the largest tax reform in the history of this country.”
However, not every observer is buying the hype surrounding Trump’s tax plan. David Stockman, former budget director under President Ronald Reagan turned Austrian economist, told CNBC that although he likes Trump’s plan in theory, he objects because “you have to pay for it either with a new tax like the border adjustment tax, which is dead, or spending cuts which Trump has ruled off the table.”
“What you have down there is a total fiscal calamity that is going to basically dominate Washington,” Stockman said. It remains to be seen whether Paul’s optimism or Stockman’s pessimism will come to fruition. Further details about the plan are expected to released by June.