Trump Tax Cuts To Starve The Beast – Ep. 244

The Peter Schiff Show Podcast

Summary: President Trump actually delivered on his promise of the largest tax cut in American history, and he delivered it on time. Trump may have presented a plan with built-in bargaining positions, or he might even intend to pass a tax bill that will "starve the beast". The interesting thing is that the President is applying this 15% tax rate to pass-through entities, such as LLC's, which will encourage most businesses to shift into a different business model to take advantage of the low tax rate. In other words, people currently at a 43.4% rate will pay 15%. This is going to cause two things to happen that will hurt the economy and a lot of people in the middle class: a big increase in consumer prices and inflation. Will Republicans vote against the biggest tax cut ever based on the fact that it adds to the debt? Ultimately, a resulting fiscal crisis might force Republicans to vote to cut spending. Donald Trump was right. He actually lived up to expectations, in fact, he might have exceeded them When it comes to the magnitude of the tax cut that he proposed - on schedule On Wednesday, today, Donald Trump unveiled his idea for what could well be the biggest tax cut in American history Ordinarily, I would be all in favor of the biggest tax cut in American history, if it were accompanied by the biggest spending cuts in American history Government costs what it spends - you have to pay for government, one way or another So if you're going to have big government and you're going to spend all kinds of money, the most efficient way to raise the money is through taxation And of course the most efficient form of taxation would be a consumption tax, sales tax, tariffs Not an income tax An income tax is the worst way to raise revenue An even worse way to raise revenue is by going into debt Borrowing money and then printing money will cause prices to rise, eventually interest rates to rise And ultimately will result in enormous tax hikes To repay all the money that you borrowed What Donald Trump is doing, is he is offering an enormous tax cut, but no spending cuts And what they are saying is that the tax cuts will pay for themselves because there will be so much extra growth That the government will make up for the difference based on more people working and more people having higher incomes and even though the tax rates are lower, the net payments will be higher None of this is true These tax cuts are so enormous that there is no way that the economic growth can make up the difference Even if we get the higher economic growth One of the bigger issues that people are not talking about is the impact of higher interest rates Which will certainly be a result of much larger deficits and even faster economic growth