Tax reform has replaced healthcare reform as the main target in the latest round of “Trump bashing” (unless you are an NFL fan). But like most “bashers" it’s a case of, "open mouth, insert foot." So, the resounding cry of those who are "Trump bashing" is that the proposal will reward the wealthy and penalize the middle class. However, they couldn’t be more wrong, although they seem to be convinced that President Trump will favor the wealthy. Me, on the other hand, I like to deal with that dirty little four-letter word, beginning with "F" — Fact.
Here are some facts for the "bashers." S&P 500 companies received a "repatriation tax benefit" under the George W. Bush administration, where they could invest 25 percent of their pre-tax income, and basically avoid declaring that as taxable income. With President Trump's plan, these companies will receive "amnesty" if they bring this money back to the U.S. before December 31, 2018. According to estimates by Goldman Sachs analysts, these companies have almost $2.5 trillion that are permanently invested overseas, and over $920 billion of that total is untaxed. Under President Trump's and GOP plans, these monies will be taxed at a rate of 8.75 percent, on the cash portion, and 3.5 percent on earnings far below the current rate of 35 percent. This will have over $250 billion injected into the U.S. economy within 2018.
This is a significant "jolt" to our bottom line, however, there is an even greater impact to our nation: job creation. Think about it. A corporation takes in additional "income" and has a few choices at hand. One is to pay down debt, which strengthens its balance sheet and usually makes the stock price of the company increase. That scenario is never a bad thing! However, President Trump has indicated that he may put restrictions on these types of strategies (in part anyway). So, what is the next best move? Pump this money into research and development. Improve existing products, goods and services, or create new ones. Cultivate new markets. Create new products. All of this will have one long lasting impact, and one that more than anything is on President Trump's agenda: job creation!
This is what a good CEO/leader/president does, he/she enhances the status and overall "health" of the corporation/country they lead! This is exactly what President Trump is attempting to do for the United States of America. He is creating jobs for Americans. He is attempting to strengthen the very foundation of the United States of America by boasting the quality of life for America and Americans. He is not only trying to repair our broken economy but to restore it to where it used to be, the best economy in the world and the envy of all others.
To date, the Senate has dropped the ball on the repeal and replace of Obamacare. Let's hope they do not fumble tax reform! Now, more than ever, In Trump We Trust!
Dante Vitoria is Founder and CEO of The Vitoria Group. For over 30 years, Dante Vitoria has been running his own firm, The Vitoria Group, which has broad experience in working with companies of various sizes to fulfill its clients' financial needs. The client base is extremely diverse, ranging from international money centers, domestic banks, insurance companies, and financial firms. The Vitoria Group provides a vast array of financial services specifically tailored to enable clients to meet their goals — the assistance, direction, and access to professional banking and other facilities. Dante's 30+ years experience as an investment banker on Wall Street, provides insight, expertise and comprehensive advice with a down-to-earth-approach on key aspects of local and international economics, personal finances, and financial planning. To read more of his reports — Click Here Now.
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