This is the last of a three part series on impending tax reform featuring an exclusive interview on Liberty Nation Radio with Stephen Moore, famed free market economist and key advisor to Donald Trump during the 2016 presidential campaign. In parts one and two, Moore discussed corporate and individual rate reductions, corporate loopholes and whether tax cuts will increase the deficit. This final part focuses on whether this tax reform bill will spur economic growth.
While Senate Republicans are facing a firestorm of criticism for proposing to delay the corporate tax cuts promised in the House version of tax reform, the effort to sell the first sweeping reform of the tax code in more than three decades has now reached the critical stage. After the multiple debacles of attempting to repeal and replace Obamacare, the question of whether Republicans can actually agree on anything has come front and center. And it largely obscures the most significant issue: whether the final legislation will actually provide enough relief to individuals, small businesses, and corporations to be a difference-maker in the American economy.
Few people are better positioned to evaluate the recently-released House version of tax reform than the key economic adviser to Donald Trump during the presidential race. Stephen Moore, famed economist and founder of the Club for Growth, joined us on Liberty Nation Radio to discuss whether this proposed legislation will reach its ultimate goal of spurring economic growth:
Tim Donner: Let’s talk economic growth because after eight years of Barack Obama, where we never once reached even 3% economic growth, we now see something that used to be common, but is now considered remarkable, and that is a growth rate of 3% in the economy for the last two quarters. Is this is a Trump bump or just an organic natural correction in the economy?
Stephen Moore: I don’t think there is any question. This is Trump bump because we know that pretty much with certainty because look what happened to the stock market the day after the election, and it’s just gone up and up and up ever since. It’s the most remarkable thing I’ve ever seen. We’ve seen a five trillion … That’s five trillion, Tim, with a T, increase in wealth just since the election, which was just about a year ago. In one year, the stock market’s up by something like 23%, and the wealth of the country’s up five trillion. That’s enormous lift. Right now, we’re seeing, and as you said, with the growth rate of 3% last quarter. By the way, we would have had 4% had it not been for the hurricanes. That knocked about a percentage point off the total growth.
In recent days, we just had a new jobs report that found a 300,000 increase in jobs, which include the jobs that they had underestimated from the month before. That’s a good number. It’s not a great number, but it’s a good number, and I think the economy has a little new bounce in its step. No question about it, and I’m here to tell you right now, Tim, we get this tax cut through, we’re not talking about 3% growth, we’re talking about 4% growth, and that’s a big deal.
Tim Donner: Those numbers augur well for an economy that’s been gasping for air for a long time.
Stephen Moore: Exactly, exactly. All my liberal friends, in the Obama administration, I have to debate them all the time on CNN and these other shows. For the last year, it’s been, “Trump is lying. He’s lying when he says we can get to 3% growth.” Well, we are at 3% growth, and they hyperventilate when you say the economy can go up 4% because, as you just said, Obama never came anywhere near 4%. They figure if Obama couldn’t do it, how could Trump do it, but he is achieving that dream, and I feel good about the economy. I feel good about the stock market and I’m bullish right now. I really am.
Look, it’s always easy to overestimate what Republicans can do because they always … Sometimes, they find a way of seizing defeat out of the jaws of victory, but I think in this case, there’s a good chance Trump’s vision of a tax cut by Christmas is … I’ve heard of about 60% we’re going to get this done.
Tim Donner: In the Obama economy, 2% became the new normal, so 3% seems spectacular, but let me ask you one more thing before we let you go. That is, that as much reform, serious reform, and tax rate cuts as are included in this bill, what good things that you thought might be in this bill were left out, and how important are the things that are not included in this first shot at tax reform in more than three decades?
Stephen Moore: Well, look, overall, I like this bill a lot. I think it will help the economy. Is it everything I want? Certainly not. I was disappointed … When I worked with Donald Trump with my buddy, Larry Kudlow we had a 15% rate on the businesses, for all businesses, and that’s something Donald Trump liked a lot and, unfortunately, we raised that to 20%. I’m not entirely happy with that. The other thing I’m a little disappointed in is I’m an old flat tax guy. I’d love to see just get rid of all the loopholes and the tax system. This gets rid of some of the loopholes, but it doesn’t get rid of all of them. The favor factory in Washington and the K Street is not going to be put out of business here, although a lot of people on K Street aren’t happy, and that’s probably a good sign.