Former White House economist details 'rich irony' in the reconciliation bill

Dems’ planned tax hikes put America on ‘wrong side’ of Laffer Curve: Tyler Goodspeed

Former Council of Economic Advisers acting Chairman Tyler Goodspeed provides insight into the economic impact of the Democrats’ spending and tax plans. 

Tyler Goodspeed, a top economic adviser in the Trump administration, detailed the "rich irony" in the reconciliation bill and argued that the Democrats’ planned tax hikes puts America on the "wrong side" of the Laffer curve during an interview on FOX Business’ "Mornings with Maria" on Wednesday. 

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TYLER GOODSPEED: When I add up the growth effects of the spending provisions in here — in this 3.5 plus trillion dollar bill — those gains are more than offset by the negative effects of the tax hikes. And you know that there are small business provisions in here, tax hikes on small businesses, also, there's an inflation tax. 

But here's a rich irony in the reconciliation bill — note that they leave in place the carried interest loophole for hedge fund and private equity billionaires. Note that they plan to raise or eliminate the cap that the Trump administration implemented on state and local tax deductions, which is a massive tax expenditure for the very richest households. And note that, yes, they're raising capital gains to 28.8%, I think — you add in state taxes and that brings it up to 37%. 

That is on the wrong side of the Laffer Curve, meaning investors are going to be paying less in capital gains tax, but they're going to be paying less in capital gains tax, because the Democrats are not getting rid of ‘step-up in basis.’ So basically what's happening or what will happen is that rich investors will be paying less in capital gains tax because they're going to be deferring those gains until when they can pass it off to their children in inheritance or trust funds. 

LAFFER 'TERRIBLY CONCERNED' BIDEN POLICIES A 'HUGE HINDRANCE' TO ECONOMIC GROWTH

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Tyler Goodspeed on economic growth options under Biden admin

Former Council of Economic Advisers acting Chairman Tyler Goodspeed on economic growth, inflation, America’s debt ceiling, infrastructure, taxes and spending negotiations on Capitol Hill. 

 

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