David Stockman, director of the Office of Management and Budget under President Ronald Reagan, is no fan of the current Republican tax-overhaul effort, saying this on MSNBC about the pending legislation:
The so-called Father of Reaganomics’s remark was not linked to any withering away of his conservative bona fides nor a shift in his party affiliation.
Stockman, for instance, said President Donald Trump’s instinct is correct: The economy is not in great shape and needs help. But, he said, the Republican tax plan as it’s taken shape is hardly the solution to the economic woes of Trump’s voters in the Rust Belt. Had helping them really been the goal, said Stockman, a payroll-tax reduction would have been the right instrument. That, he said, would be an effective means of boosting pay and driving job creation.
Instead, Stockman later said in a Bloomberg interview, “this massive tax cut” is “essentially going to do nothing good for the economy” but will “add to the national debt, you know, upwards of a trillion and a half [dollars] over the next four or five years.”
Since businesses already face “the lowest cost of borrowing in recorded history,” per Stockman, there is no reason that lowering the corporate tax rate or the tax benefit afforded pass-through entities will lead to anything other than “more stock buybacks, more dividends, more financial engineering.”
Read on: Stock-buyback announcements spike — dropping a strong hint at what CEOs plan to do with tax savings
Key Words: Investment strategist Paulsen says tax cut could push U.S. into recession