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Trump Reverts To Populist Roots In “Tax Plan” Speech; Sets Up Congress For Another Epic Fail

Courtesy of ZeroHedge. View original post here.

Update:  Following Trump's Springfield, MO speech, Treasury Secratary Steve Mnuchin issued the following statement which, much like the Presidnet's speech, calls for more jobs, higher wages, higher GDP growth, sugar, spice and everything nice….yet provides absolutely no details on how to accomplish any of it.

“Today President Trump reaffirmed his commitment to deliver meaningful tax reform to the American people that is focused on growing the economy, stimulating job creation, increasing wages, revitalizing small businesses, and expanding economic opportunity for all Americans.

“As the president explained, his vision of tax reform creates good paying jobs, grows wages for workers, focuses on tax relief for hard working, middle income families, and makes American businesses more competitive.

“Historically, members of both parties have understood that the tax code is too complicated, creating a rigged system that only benefits wealthy special interests.  We must make it fairer by leveling the playing field for American workers and job creators, in order to grow the economy and reinvest trillions of dollars back into our country.

“Americans understand that middle income taxpayers and their families need tax relief and a simple tax code so they keep more of their paycheck and spend less time filling out their taxes.

“At the Treasury Department, we are committed to continuing to advance the President’s vision on tax reform while working with Congress to pass a plan that will lead to economic growth and job creation to benefit all Americans.”

* * *

Earlier this morning we speculated that Trump's "tax plan" speech in Springfield, Missouri, would be heavy on the populist rhetoric but light on the actual details.  He didn't disappoint.

From the start, Trump's speech played more as a sales pitch to middle America than a substantive policy discussion.  Among other things, his opening commentary focused on the middle class, NAFTA and eliminating the "crushing tax burden" that is hurting "main street" America.

*TRUMP: BRING BACK MAIN STREET BY CUTTING CRUSHING TAX BURDEN

*TRUMP: MANY REGULATIONS ARE UNNECESSARY, `GOING FAST'

Unfortunately, but also as predicted, minimal details were provided as to how exactly a Trump tax plan might be crafted to meet those goals.  In terms of 'details', Trump only said that any "tax plan" should be focused on the following four principles:

  1. Simplification of the tax code
  2. Lowering of the corporate tax rate to be more competitive globally
  3. Tax relief for the middle class
  4. Ability to repatriate corporate cash held overseas

On corporate taxes, Trump said the U.S. has lost it's 'competitive edge' due to having one of the highest corporate tax rates in the world.   He went on to say that he "would like" to see the corporate tax rate lowered to 15%, which is the only actual number discussed during the speech, but even that seemed somewhat negotiable.

*TRUMP: WOULD LIKE TO BRING CORPORATE TAX RATE DOWN TO 15%

*TRUMP: U.S. HAS `TOTALLY SURRENDERED' COMPETITIVE EDGE

Meanwhile, clearly a little gun shy after the Obamacare repeal debacle, Trump laid the burden of drafting and passing tax legislation squarely at the feet of Congress saying that he doesn't "want to be disappointed by Congress" again.  One almost gets the sense the administration has simply chosen not to provide details to allow Congress the ultimate flexibility to draft whatever piece of legislation they can actually pass…which raises questions as to whether such a bill would even be acceptable to the White House in the end…

*TRUMP: DON'T WANT TO BE DISAPPOINTED BY CONGRESS ON TAX REFORM

*TRUMP: `I THINK CONGRESS IS GOING TO MAKE A COMEBACK'

Trump also took a strong shot at Missouri's senator Claire McCaskill (D-MO), saying that she must "help with tax reform or be voted out" of office.

*TRUMP: MCCASKILL MUST HELP WITH TAX REFORM OR BE VOTED OUT

Finally, Bloomberg highlighted that while Trump thanked Steve Mnuchin and Wilbur Ross for their help, Gary Cohn's name was noticeable absent in Trump's opening comments.  Of course, this could mean absolutely nothing, or it could mean that there was more to the rumors that surfaced last week suggesting that Gary Cohn considered resigning in the wake of the Charottesville controversy.

Of course, the real question is whether tax reform is even possible given the fractured Republican party in the House and a very narrow Republican majority in the Senate.  Certainly recent history would suggest not so much.

Below is a replay of the relatively short speech which starts around the 43 minute mark:


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