President’s blueprint of the budget: How it could affect San Diego
SAN DIEGO (KUSI) — The tax reforms offered by the president’s financial advisers offered no specifics about how all of this works, details to come later.
What we got were broad principles of tax reform, but will these principles work? Here’s one view from San Diego.
It comes from San Diego Tax Fighters Chairman, Richard Rider, who sees a lot of good stuff in what he’s heard so far. But what we’re seeing is likely to be quite different than what we finally get.
Who among us doesn’t want lower taxes?
"Here we are getting benefits to the rich, benefits to the middle class, benefits there, child care credit increases. It’s a honey pot," Rider said.
For Rider, lowering taxes for corporations and individuals is a good thing.
"We gain by them having lower tax brackets and indeed, there’s been some bump up in the stock market anticipating the prosperity that can ensure from this," Rider said.
Eliminating the death tax, the Obamacare tax, capitol gains and tax cuts are fine, but how do you pay for it?
By the Laffer Curve Theory President Reagan used in the 1980s, tax cuts will grow the economy enough to offset the lower tax collections. In other words, it’s revenue neutral.
"The problem is just dropping a tax bracket while it creates more revenue, it oftentimes does not make up the total shortfall and that’s what’s going to happen," Rider said.
There will be a shortfall and that’s what worries Rider.
"They’ll cut the taxes, which is fine, but not cutting the spending, that’s a problem. While trying to make up the difference with deficit spending. I’m nervous that’s the easy way out that they may choose," Rider said.