EKIP– Expert Club for Economics and Politics A Different Opinion
Our economist Nikola Filipov appeared on the show "Boom and Bust" on Bloomberg TV Bulgaria to comment on President Donald Trump's tax reform. He shared that there are a lot of unknowns in the reform as a whole.
"What's interesting about Trump's tax reform is that he doubles the so-called tax-deductible expenses," he pointed out.
"Trump is imposing a 10% tax on outgoing payments to parent companies, which will certainly slightly offset all these positive reforms he is making. This is a somewhat anti-market measure that, in my opinion, is not very well thought out." Watch the full video:
Meanwhile, our Chairman Stoyan Panchev summarizes the positives in Trump's reforms:
"1. (Almost all) state and local tax breaks are eliminated. Which may sound bad, but it is precisely because of such exemptions that many states (especially Democratic ones) have incentives to raise taxes and work with lobbyists for the breaks."
The number of income categories is being reduced from 7 to 3 (the opposite of what they want with the campaign for a minimum threshold in our country)
2. Corporate tax falls from 35% to probably around 20% - with Trump saying he wants to lower it to 15%. (let's see what the iron heads in the EU will do)
3. From global, the tax system in the US becomes what it is in most places in the world - territorial. That is, if you get back the money you spent in France, they won't impose another tax on you
Because of items 2 and 3, it is expected that about 2-3 trillion dollars of American companies will immediately return to the US
4. Trump and Republicans begin regulatory dismantling of the individual mandate in Obamacare
This reform is far from perfect, but it's the biggest thing done in the field since the 1980s. Only three senators hold the balance in the upper house of Congress, so it's the best we can do at the moment, and it's still a lot. And yet - taxes are too high.
The important thing from now on is to cut spending. Grover Norquist claims that since April, Trump has also been cracking down on the social system.
"I was very skeptical of Trump - I've only seen unique things from him lately (especially if he can isolate Bannon and his influence)."
Video source: Bloomberg TV Bulgaria
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