The U.S. economy is in danger, and the longer the Trump tax plan is delayed, the greater that danger becomes. President Trump wants large tax cuts in corporate and individual rates. That’s good, because right now America has the highest corporate tax rates in the developed world.
But here's the worry: If you run a business and I tell you that your taxes are going to fall … next year, what do you do? You put off expansion until next year.
This is what happened to President Reagan at the beginning of his term. He proposed big tax cuts, but he let the Democratic congress talk him into deferring the cuts for a couple of years. Predictably business managers deferred expansion and the economy plunged into recession. Reaganomics got blamed for a contraction which was caused by the delay of Reaganomics.
The same thing happened with the Bush tax cuts in 2001.
President Trump can’t afford to make that mistake.
He should push his tax plan now.
