Is the Trump Tax Cut Euphoria Justified?
Monthly Market Commentary: May 1, 2017
Simon Black, the founder of Sovereign Man (www.sovereignman.com), made some comments which truly astounded me. In his April 24, 2017 missive he wrote that, “In a poll conducted a few days ago by NBC News / Wall Street Journal, a record 57% of Americans responded that they want MORE government in their lives, and that the government should be doing more to solve people’s problems.
That’s the highest percentage since they started asking this question in 1995.
In fact, 57% is nearly double what people responded in the mid-90s. Furthermore, the number of Americans who feel the opposite, i.e. responded that the government is doing too many things that should be left to private businesses and individuals, fell to a near record-low 39%. Bottom line: people want more government.”
I find these poll results hard to believe given that over the last hundred years, as Western governments expanded as a percentage of GDP economic growth rates slowed down.
I studied fiscal and monetary policies and learned that taxation is an extremely tricky issue because, as the economist Gunmar Myrdal pointed out, “Taxation is a most flexible and effective but also dangerous instrument of social reform. One has to know precisely what one is doing lest the results diverge greatly from one’s intentions.” I seriously doubt that Mr. Trump and his ex-Goldman Sachs Treasury Secretary would know what they are precisely doing.
I also remember from my studies Sir Thomas White’s (British Minister of Finance 1911 - 1916) words:
“In such experience as I have had with taxation – and it has been considerable – there is only one tax that is popular, and that is the tax that is on the other fellow.”
I am enclosing here the link to Sam Husseini article entitled How Trump and Obama are Exactly Alike. It is an excellent read and exposes an important problem democracies face.(www.counterpunch.org/2017/04/17/92072)
With kind regards