Details of President Trumps tax reform plan. The Negotiation Team includes Top Republicans in both houses including speaker paul ryan, brady andnnell, kevin orrin hatch. Hillnnouncement on capitol we will bring you that live. Have mnuchin and gary cohn represented the trump in crafting the framework. They are accompanying President Trump in indianapolis today where he will make remarks centered around that tax plan. For more on what we are going to see, plenty of leaks already at least speculation furious on this. Start with what we are expecting on the corporate side. Longawaited. This is the moment Republican Leaders have been waiting for all year. Their best chance to secure a major piece of legislation and an option and by the end of the year especially after failing for the third time earlier this week on the effort to repeal and replace obamacare. We know the framework that the leaders are about to unveil is going to call for a 20 which manyax rate including in the white house have thought is unrealistic because the map is so difficult. Its going to call for a maximum on Small Businesses including trump organizations family held. Its going to call for lower in the top tax rate to 35 with some flexibility for committees if they want to impose a higher rate on the top earners. Scarlet what about the territorial tax system . This has been a huge concern for companies. They cant bring it home without incurring a huge tax bill. I know they are looking into some kind of onetime tax brief. What about Going Forward . Move toow they want to a terrible system from a worldwide system. This is something republicans widely agree on. The president has talked a lot about this as well. There is Something Like 2. 6 trillion in corporate profits parked overseas that they want to return home. They are talking about lowering the tax rate so there is a onetime option to bring it home and potentially of repatriation Going Forward so we assume the money is going to be taxed. That remains a question mark. We will come back to that. Taxident trump delivers his speech today. We will bring that to you live. Will have an exclusive halfhour interview with former u. S. Treasury secretary jack lew. All very exciting. Dont miss that on friday. Scarlet for Market Reaction to President Trumps tax plan lets bring in oliver renick. We have seen companies with high tax rates get a lift in early days of the administration only to see that falter as tax reform kept getting pushed off. Are we seeing a bit of a comeback . A bit of a comeback. Nothing to be totally up in arms about if you were thinking on the entire agenda not going through. It wasnt just the high tax docs. In addition also the sort of resurgent trump trade thats now happening. Thebottom line is that markets were waiting for this. This is a key part that was going to be very influential and very incentivizing for investors and companies to get excited about trumps policies. Health care is one thing. I think this is what folks have been waiting for. Bloomberg thishe is looking at tax policy uncertainty. Its pretty interesting because i think this tells a pretty big about just the idea that its going to be favorable to wall street. You can see the spike in the big blue chunk. And speculation about where the tax code is going to go. Where i think a lot of it investors have counted on. No matter what happens we know this is going to be a primary mission of the white house. A lot of these wall street guys helping put those ideas forward. Thats why its going to be positive. Julia were showing you live pictures in the United States capital waiting for that framework announcement from the house and Senate Leaders. When they talk about this in just over 10 minutes we will have some more concrete details as far as this tax plan is concerned. So much needs to be decided. For a while they were talking about tearing up the tax reform plan with infrastructure spending. Thats not happening as far as we know this time around. How do Industrial Companies look in spite of this . This is kind of a bifurcated message that has been coming from the white house. We want to tax reform, we want to get infrastructure moving forward. Probably infrastructure might come handinhand if we get tax form done. We figure out what companies are going to be paying based on where they are. Moneyres going to be behind a u. S. Economy maybe we are willing to spend on ourselves and that degree of Capital Expenditures if we have the rate to that is going to free up some cash for us. Once we see the details on what the International Part is going to be that could potentially be a boon to investors that are looking at stocks based on what the money coming back into the u. S. Is going to do which is largely going to be buybacks. Goldman said it will be roughly split in half looking at overseas cache files. When they can borrow money here so cheaply you have to wonder. Where the investment goes. Scarlet oliver renick, thank you. Lets get a check on the other headlines. Even though Senate Republicans have scrapped their latest attempt to repeal obamacare President Trump isnt giving up. Beforeg to reporters leaving the white house this afternoon for indiana the president said he would negotiate with democrats to see if they can work out a better plan. When asked whether he would fire health and Human Services secretary tom price over allegations he used governmentfunded private jets for personal travel the president said, we will see. Mr. Trump is calling a great guy who ran a fantastic race after winning the senate. The president that on twitter that he spoke to him tuesday night for the first time. The president and allies of Mitch Mcconnell backed mores appointment in that race. Iraqi kurds have voted overwhelmingly for independence in a controversial referendum. 90 of voters chose to separate from iraq and Iraq Central Government opposed the nonbinding referendum and are threatening economic sanctions against the kurdish region. Several stopped flights into the region at the request of the iraqi government. The university of louisville has placed mens head basketball and athletictino director tom jarrett on administrative leave. It comes after the schools knowledge today that the mens program is part of a federal investigation into alleged bribery of recruits. The allegations are serious. It is vital for this university rulesct it here to ncaa and of course federal law. Doing nothing would be a tacit endorsement of unethical and criminal behavior. Federal prosecutors in new york announced at least three Top High School recruits were promised payments of as much as 150,000 using money to attendy adidas universities sponsored by the Athletic Shoe company. Global news 24 hours a day powered by more than 2700 journalists and analysts in over 120 countries. Im mark crumpton. This is bloomberg. Investorsoming up prepare to parse President Trumps longawaited tax plan. Republicans are doing rays to unveil details at any moment now. This is a live shot of the rayburn room. Weve got members of the Senate Finance committee and the house ways and Means Committee coming out in just moments. His is bloomberg julia this is bloomberg markets. Im julia chatterley. Scarlet im scarlet fu. We are moments away from the announcement of President Trumps tax plan. Paul ryan, Mitch Mcconnell and others will be speaking from the rayburn room. When they come out we will bring you to them. President trump made some remarksPresident Trump made some remarks on the tax proposal before he left for indianapolis. Take a listen. I wanted to start at 15 so that we got 20. The number 15 was so low. I wanted 15 so we got 20. 20 is my number. I am not negotiating that number. Scarlet he is referring to the Corporate Tax rate as well. With what we are expecting. You got the scoop yesterday on what this tax deal will likely include. President trump talked about 15 percent as a negotiating point to get to 20 . We know the individual tax rates would be coming down as well. What is likely to be kept the same . In the tax code they want to make sure its a plan that benefits the middle class. They are trying to pitch this is the most Beneficial Program that they can for middleclass taxpayers. There are some things that could topin the same such as the break for top earners in the United States. That would be 39. 6 . Currently they have in their framework the top rate at 35 . Congress space for congress to decide julia you are saying the lowest rate is going to rise slightly and the highest rate is going to come down . Politically that sounds like an outage moment. At the bottom end is going to double. Optically i would suggest weve got a bit of a problem. What is the president going to say about this deal . Democrats are practically giddy over this. In thet error are last hour i interviewed representative yarmouth was already criticizing the point that you just made. More so politically speaking the president did receive some encouraging news from house members members who have backed off wanting this, a 400 billion deficit reduction and mandatory deficit cuts. They are not going to be pushing that through the budget reconciliation process. In other words they are clearing the way for tax reform. They are not going to be a thorn in the side of the big six. Getting some positive feedback from conservatives right now which is what the president needs because he did not navigate that will politically interparty politics on health care. Theyre trying to correct course with tax reform. Weve got republican parties no one cares about and the deficit. Were looking at kevin brady who will be speaking shortly and when that begins we will take you to it. Lets bring you into this conversation as well. Health care didnt get done and it was supposed to produce savings that would help fund these tax cuts. Much less ambitious is this tax proposal because health care didnt get done . That was one of the main arguments in favor of doing health care, trying to push it through at the last minute. They wanted to do everything they could to get rid of the net Investment Income tax. To start getting the rate lower for top honors so they wouldnt have to do all of the heavy lifting in this plan. The plan does have to be revenue neutral if they want to take it through the reconciliation process which would allow it to get through the Senate Without any democratic votes. The are looking at where they going to get the offset in order to pay for these pretty steep rate cuts. Talk to me about senator orrin hatch as well. He has used quite interesting language about this. He says its a base for them to start dropping legislation. Its guidance. How long how much is the plan going to change when they actually start to draft legislation . I have been speaking with lawmakers and aides all day. I have been pressing them, how are you going to pay for this . All of them right now dont have an answer. Put inson that you question, senator orrin hatch is definitely going to be one of the Key Stakeholders in this debate. How they pay for it without to be a really grown big question that has to be answered. Julia maybe paul ryan can answer that as he takes the stand. Lets listen to what he has to say. 1986 thathis dome in Congress Took the final vote on the last overhaul of our tax code. That long. After that vote resident reagan said americans would finally have a tax code they could be proud of. It was true then. But things look very different today dont they . Of a source of pride our tax code has become a constant source of frustration. Its too big. Its too complicated. Its too expensive. Are taking the next step to liberate americans from our broken tax code. Framework delivers a new tax code that is simple, fair, progrowth and profamily. Cutting taxes on hardworking americans so that you can keep more of your hardearned paycheck. Simplifying the tax code so that you can file your taxes on a form the size of a postcard. Reforming our tax system so that businesses particularly Small Businesses can gain a Competitive Edge on our foreign competitors and taking bold steps to bring jobs and profits from overseas back home to the United States of america. This is vital to americas future and it is urgent. We want the American People to wake up in the new year with a new system. Products writers on the house ways and Means Committee will work with members of the finance committee to turn this framework into legislation. To thank our counterparts in the senate and in the administration and i want to especially thank President Trump for his leadership. To him this is a onceinalifetime opportunity that is all about more jobs, fairer taxes and bigger paychecks for American Families. This is a now or never moment. The choice before us is really clear. To the talking heads on tv and the special interests who want to maintain the status quo or we can work this momentseize and do with the American People sent us here to do. We can rise to the occasion and write our own future. We can finally get this done for more jobs, higher wages, bigger paychecks. A stronger economy. For workers, for our children and for the more prosperous in the more confident america that well deserve. Thank you. Senator mcconnell. No one has been more passionate about what we are announcing today than the speaker for a longer period of time and he has laid it out very well. To summarize what this is about its about getting america going again. Providing jobs and opportunity here rather than overseas. Providing middleclass tax relief for hardworking American Families so they can get ahead. Put another way taking money out of washington and putting it in the pockets of our citizens. Good afternoon. Thank you later mcconnell and thank you speaker ryan. For your leadership on a big bold tax reform effort. To be with you today united around a framework that paves the way for bold transformational tax reform. Americans have been waiting for years. They have been waiting too long for washington to fix our broken tax code. They have been waiting too long for better jobs, more takehome pay and a stronger economy. Today House Republicans joined with President Trump and are Senate Colleagues in letting the American People that we are taking action now. Action that will bring more jobs , fair taxes and bigger paychecks. This is a National Test of after years of work in the house the Emergency Alert system. This is only a test. Broadcast and Cable Operators in your area have developed this system in voluntary cooperation with fema, the fcc, and local authorities to keep you informed in the event of an emergency. If this had been an actual emergency, an official message would have followed the alert tone. This concludes this National Test of the Emergency Alert system. For the middleclass workers and families in that main street job creators merely struggling to get by today. This is our year to chart a new course. To provide tax relief to millions of middleclass families and those who want to be middleclass families. To help workers and job creators of every size in every community compete and win anywhere in the world especially here at home and to help make the tax code simpler and fair so americans can keep more of what they earn. So fair and so simple nine out of 10 americans will be able to file their taxes using a simple postcard style system. We have a lot of work ahead today marks a major step forward in that process. The ways and Means Committee leader mcconnell, speaker ryan, we are ready to build on this get tax reformlp across the finish line for the American People. Colleagues arete ready to do the same. With that i am proud to turn it over to the chairman of the Senate Finance committee, senator hatch. Thank you senator. We are counting on you doing a really good job here in the house. I was here in 1986 when we did massive tax reform. I have to say we reaped great benefits from it because the economy was turned around. We went forward like never before. We intend to do that this time as well. I am proud of our members of the house for the work they are doing, or speaker chairman and others as well working in the house to try and bring a bill through that will make a real difference and im very proud of and ourer in the Senate Finance committee in the senate of people who are working together and i hope we can bring democrats and republicans together in the best interest of this country. We are going to do it. We are tired of things going the way they are going. We are going to turn this mess around and i hope we will have support from all of our senators and Congress People on both sides of the aisle for the benefit of our country. I would like to ask number of the Senate Finance committee to come up. The framework announced today sends a loud clear message. That is the tax relief is on the way for the american family. After eight years of economic and wage stagnation under the Obama Administration families in this country say they are living paycheck to paycheck and one third of the families in this country say there are only 400 away from a financial crisis. That is unacceptable. Thats why this tax relief effort will bring muchneeded relief for working families in this country. Lower rates for families. Doubling of the standard deduction for families. Expanded Child Tax Credit for families in this country will mean they will have more to on themselves and their families instead of sending it to washington, d. C. Thats a good thing for families in this country. Us is about bigger paychecks, higher wages, more Economic Growth in our economy that benefits every american and i look forward to working with my colleagues on the Senate Finance committee with their colleagues in the house of representatives and with the administration to make this happen. I hope there will be some democrats willing to work with us. If they are really for middle income taxif they are really foe income tax relief why wouldnt they joined hands with us and make a possibility for the American People. We look forward to what comes ahead. This is a very exciting time. Something long overdue that will be very meaningful in the lives of americans. Thank you. I would like to introduce the chairwoman of the House Budget Committee diane black. Good afternoon and thank you to speaker ryan julia we will leave them speaking, introducing the reasons why they need to reform the tax code and bring taxes down. Our washingtonk reporters on the hill. Kevin, we were discussing the likelihood of being able to agree some form of tax reform. Orrin hatch was saying hes proud of what the house is doing but when it comes down to it how easily are they going to be able to sign off on something based on the details we believe we have at this stage . There are two points i would like to make quickly getting a snapshot on that. The first is about just how eager republicans are to push back against criticism that this is simply tax cuts for big businesses and the wealthy and not for the middleclass and low income americans. We heard that, noting that 50 of americans say they are living paycheck to paycheck. To push backtrying against him a credit criticism. The second point that is the ise broad political point the caliber of lawmakers in both the house and senate that were behind the podium clearly sending a message to this white house. Dont forget about us because you still need us in order to accomplish a legislative win and we are just around the corner. Rom 2018 midterm elections this morning in the shadow of the alabama race. A situation where republicans are united in trying to accomplish something. If the Republican Congress cannot a copper statue form what can they do . Julia we heard them start to introduce the need for this. Scarlet this is the kickoff to their effort to reform the tax code. President trump giving a big speech today in about 15 minutes. Have not yets they given us any details to work with. Of the details we have are based on your reporting specifically. Are they just going to let drip trickle out Like Health Care unfolded . They had a statement of principles at the end of july. We are just now getting a framework to its nine pages long. There is left up to the taxwriting committees. I thought it was interesting they both alluded to the fact they wanted this done by the end of the year. In place bythis january 1, 2018 for American Families to file their taxes next year. Thats going to be a really important timetable to look at to start reading the signals on if they are relaxing that language at all. This could take longer they expect. Scarlet they are all smiles. They obviously came together. It kind of reminds me of the rose garden pep rally. They said they were on their way and theyre only about a quarter of the way. Gota they never actually across the finish line. There is recognition that we need to do something this year ahead of the midterms in 2018. Grow by 3 p rich up express 6 , which i think people agree is unlikely. They want Economic Growth to pay for the tax cut. You make such a great point with local taxes. Theirare republicans in who will look at this and say actually, i cannot afford this. 1. 3 trillion, it is simply not enough. This appears to be a Republican Party really not going for that. They left room for additional loopholes to be eliminated. Afterre they start going the different elements of the certain agesnefit choose and businesses, you will see a lot of pushback from lobbyists. Everyone of those provisions has an army of people trying to defend it and it will be a matter of what we can have the political will to eliminate, and how they turn out the dials on the different provisions in the tax plan. The lobbyists. This is where you separate the wheat from the chaff. Kevin, our chief washington correspondent on capitol hill andda and capitol hill, President Trump in indianapolis, we will take you there live when it against. A pick a quick programming note, on friday, we will have a half hour interview with the former u. S. Treasury very jack lew. We are still waiting for the details. Auld like a process proper announcement, please, some details. She is pleading now. Marathon petroleum has its eye on pipeline. Is looking to invest in minds on the east coast to grow its natural gas business p or mike mckee spoke with a ceo and an annual meeting in cleveland and began by asking about consolidation trends he is seeing in the industry. I believe the industry will continue to consolidate. As i presented, we are the third gest refiner, 100,000 barrels or so separates us from being the second largest refiner. That is not important. It is what is the quality of refining assets question mark assets . You will see more in the retail space or mlp space and that is ago, ack to. 5 years two years ago, we made pipeline since then and we have been involved in the retail space. We bought the east coast assets back in 2012 and we have an very busy trying to collect highquality assets. Not from a buy them standpoint but earnings. Those are performing way of above the plan and were fine. Any plan to export using the pipelines . With the acquisition of markwest, we are into the natural gas liquids. 7. 6 cubic feetut per day. We did not have high plans all the way to the east coast. We have looked at a number of opportunities to possibly invest in some of those pipelines. The east coast or return around from one of our pipelines today, whether we turn that around and take natural gas liquids back to the gulf coast to be able to export, yes, we are involved in attempting to see will be the best opportunity. For years, i have talked about, this makes sense. Quarter and the fourth quarter, we are usually long run gasoline, that the best avenue, but you also look at the pipeline from philadelphia that to pittsburgh. The midwest refineries already supply in the pittsburgh market. Has long haul barrels coming from east coast and what would make sense is move midwest barrels further to the east. Why . If you look at crude supply theed, it is coming from barrels that can come up through pushing and i believe we have much lower transportation costs, and we can refine the barrels and deliver them to the consumer. Day, we canf the deliver those to the consumer at a lower cost. Speaking. S gary President Donald Trump just afterd in indianapolis half the Senate Leaders were speaking on capitol hill. We are just waiting to see if we could time this perfectly and see him coming out of air force one. I wonder what they will speak to. Them as he went on and did say as we showed you, if you percent tax rate of worst. Court ded as part of as far as Corporation Tax is concerned. Insisting he has got the votes for health care apparently. Tot is why they will go back it. No one else is really talking about 15 . He is bringing it back into the conversation. The house and the senate, based on what we learned, are talking more about 20 rating and what is workable. Are you suggesting u. S. Administration is on a different page from the house some of it . Maybe he is prodding and pushing in his own way. The Economic Advisor said 15 does not work because it would blow up the desolate the deficit. In negotiating strategy as you quite rightly point out. Forget math right now. No one is worried much about the deficit. They are looking ahead about what this does or the company and economies and the willingness to hire workers. Absolutely but it will be interesting to see what he says on all of these points, the individual tax rate, the cuts, and leaving it open to congress to perhaps it injured is a higher tax. It will actually be quite fascinating. We are giving up. Mark crumpton with the headlines on the bloomberg first word news. Do not worry. We will keep watching. Mark political cover in indiana. The home state of his Vice President mike pence. James mattis was apparently the target of an attack in an airport in afghanistan today according to the official twitter account of a taliban spokesman. Alreadyretarygeneral left the airport when several rockets were fired at the site. At least five civilians were wounded. The attack was called a criminal act by terrorist. Theresa may says she was bitterly disappointed by the decision to slap and import tax of almost 220 of the aircraft. He says britain will work with the company to protect jobs, including 4000 in northern ireland. The Congress Department ruled in favor of boeing, alleged that he subsidies to sell it artificially low prices. Maria has strengthened off the and isf North Carolina now a hurricane again. The storm is expected to stay over the lannett and not hit land but it is stirring up rough surf and high wind. Dangerous rip currents and huge waves are expected along dangerous rip currents and huge these countries. Ed i am mark crumpton. This is a number. Julie amazon has unveiled a range of new products today. What is it mean for the competition we will be discussing . From new york, this is bloomberg. This is bloomberg markets. For its weakness, taylor riggs is here to explain what it is. Taylor i am sure you too could have figured this out quickly. Directors supporting nelson in aboard aboard. In the past, so, it is a tough fight. It is a problem for the whole consumer peoples. One thing we are talking about is she. It has gone a lot smoother than perhaps proctor and gamble. With ge, it comes to john and his attempt to turn that around and help that all go a little more smoothly. Awesome. Amazon unveiled a range of new products including a smaller and cheaper version of its echoes bigger today. Techfferings join a product vying for consumer attention for the Holiday Shopping season. Us from San Francisco is executive editor brad stone. Great to have you on. Talk us through the products. Alexas voice will be everywhere. Journeyn has been on a to find itself and create a platform of services and Hardware Devices akin to what apple has with the iphone and what google has with the android. Amazons android operating very far inot go tablets or phones. And echo, it had itself a hit. Today, it doubled speak to their technology in their home, to communicate with each other and make the devices at home mark. To buy amazon products. And that is the key. Whatever you need, you can tell alexa to just buy something. Numbers on the echo when it comes to amazons revenue or bottom line . It is part of the ecosystem and the strategy but how much does it contribute . Is this a loss leading project . Amazon tends to sell at cost or below. Echoes estimated in the million. Analysts think it is a hit for the company. It is a funnel to get to amazon prime membership program. They doubled the spending next year and triplet after that. Home and bigpples suri competitor later in the year, 349, going on sale in december and amazon, the echo plus is probably not good in terms of sound polity but it is good and amazon has offered a way to stick the echoes together and play music throughout your house. It is very amazon like in terms of beating competitors and theably losing money in shortterm and bring in the ecosystem of the longterm. Make sense. To get details on where the secondary hq would hold up question mark they held it, the glass spheres. Probably not a hint as to where the headquarters would be. You know better. They will hold a separate conference. Everything was fanfare. Senior executive editor brad stone, thank you for joining us. Tune in for a conversation with the ceo of microsoft in this weeks studio 1. 0. The full episode thursday at 5 00 new york timetune. President trump just landed and moments ago, he and he will pitch and get ready to speak ethical and 20 p. M. New york time. He l bring you when bring you there when he is speaking. Active versus passive investing continues. Latest episode of peertopeer to contest conversations. Managemuch money do you that fidel the . Million andlmost 6 that includes money we manage and money week money other people manage. Over to the half trillion dollars. The first thing my father said his we dont need the capital, that going public would bring us. Need the money, why go after it . Beyond that, it is nice to have flexibility having the financial accountability be a little tighter. For example, we dont have to go for the practice of reporting publicly or quarterly earnings. Aplaining the earnings to broad audience. We do watch our earnings carefully. It is all of our money that is a capital base of the company. Dont be confused. Concern returns matter a lot. Lets thet consistency of the returns matter less. People are not trading in or out and we do not have the than a of having a public currency to be it is one reason we generally have not done acquisitions of other companies. Using thenies do it publicly traded securities. The company is privately owned but not only by her family. About half are by the people who work there. Your father decided to do that because he owned 100 , the family did. Why decide to let the employees own roughly half the country . He always thought it was important to have partners. It is a very competitive business where we are trying to retain the best talent. The decisions to grapple with complicated decisions. It is important to have partners. That is how you have partners. Make them shareholders. It is famous for actively managed funds. With people picking stocks as peter lynch did. You dontso forth, care whether you go to the actively managed fund . Ande want to bring Products Services to help meet investment objectives. Any reasonable product is something we are interested in. Of index robust line funds right now. We are doing great in the business. We have the lowest fees and great service. We also have a partnership and a full range of proprietary etfs and some are not. Our goal is to have every thing someone could reasonably want on our platform and make it them them in a way that is with rubenstein. You can catch the full interview on peertopeer conversations which airs at 9 00 p. M. Tonight. Comingcoming up, president trus remarks on tax reform life. Life. It is a 00 p. M. In london. Scarlet welcome to bloomberg markets. Live in new york over the next hour, around the world. He republican tax plan his bring you the us remarks live. It comes after house lawmakers presented a united front on capitol hill. Under president Ronald Reagan, the Economic Advisor to get his take on the new framework. With taxes because 31 years ago, both republicans and democrats, president Ronald Reagan signed the 1986 tax reform act. Plan, cantax reform we achieve the same bipartisan support in what has become a polarized and partisan political environment . He did it with the help of both parties. A big difference between the. Ay they set up , they Start Talking to democrats about the possibility of reelected and doing some young taxes. They could move forward so when they were able to choose a bill, they had bipartisan support. A bill introduced was introduced by the democrats on capitol hill. It nearly died a number of times. The finance committee, they worked out some of the kinks. Hearings, they spoke to people, they dealt with the lobbying groups and there is a great book about this. Months. Them 10 to the point where it was finally passed it. This is nothing like that. You have got the republican song board. They close loopholes and shelters and capture the things that clearly appealed to democrats. The fundamental thing is it is not the same as 1960. That bill was revenue neutral. Was eat either lost my or gained revenue for the treasury and the bill, we dont know any offsets at this point. Designed to clearly have it budget hole. Any addons have been along party lines. One or another, they usually have some sort of tax expenditures, some way of eating the industry through the tax code and it has grown back to the months where it was before back in 1986. There are tax cuts and reform where you run the base and you get rid of loopholes and inductions and hopefully, more people participate by tenant paying taxes. On trump is a lot less popular than reagan was and how much does that map matter at the moment . Everyone matter but likes to have more money in the pocket when you talk about cutting taxes. It will be difficult for him to lobby democrats on capitol hill. American people, the matter what they think i donald trump, they may be willing to go along with the idea of getting more money on their paycheck. Thank you for joining us. Someone who knows a thing or two about the subject, illustrating yes,ax rate revenues, chairman and former economic adviser to president reagan joins us now from national tennessee. Great to have you on the show. Thank you for joining us. We just illustrated the differences we saw death between what we saw in the reagan area and what happened today. On the face of it with what you have seen so far, what is your assessment . Will be a positive tax bill. It should stimulate growth and economics and i believe it will pay for itself over the next 10 nothing isy because more powerful a stimulative than really reducing the Corporate Tax rate. I would like to see it go to 15 and not 20. They do put in territoriality. That would be very helpful. This bill could materially change the u. S. Economy. It could do that but it has to go a lot further pure democrats sign on and may have to offset those costs. How effective can the tax proposal be . I sit temporary for 10 years. 10n you are my age at 77, years is a heck of a long time. Just joking but a lot of democrats a house for sure really believe in the Corporate Tax rate reductions and a lot of reform. I do not know what type of negotiations, but i do not see why bunch of democrats dont join and really bill. He really, when they talk about raising the lower level of tax doubling the deduction so that would take a most all of the balance off so you do not even have to file, which is really nice. Is downare also doing to three brackets. Here for the low income groups is Economic Growth and jobs. The Corporate Tax rate reduction takes people with no income and a good job the Economic Growth is the key issue and i believe it is what we should focus on. A lot of democrats really want to do that as well. This is ultimately finance. They have to rely on the idea that growth will accelerate. The tax cuts they are receiving a temporary . Just growth that matters although growth is a huge component. There are other personal and business behaviors. Less tax sheltering a 20 than there was a 35 . Less tax evasion as well. More businesses located in the u. S. Will not go abroad it all of these are Behavioral Changes that will add to revenues dramatically but will not increase Economic Growth. The Economic Growth comes from capital purchases, the capital purchases, the Corporate Tax rate reduction, and the personal income rate reduction, and lobbyists they higher, are of course going to be out there protecting their specific deductions. A path for getting lower rates and a cleaner and simpler tax code or are we doing because of the special interest to have something very complicated . Special interests are very much against some publication, you are right. Het we said earlier is worked it out with moynihan. If i remember correctly, it was late at night, they had just finished a bottle of scotch together and they said was get rid of the exclusions and loopholes and drop the race from expand the tax rate dramatically and go to two brackets and that is what they did. That showdown was referred to earlier now. I hope they do this time. Is a lot of momentum pushing them in that direction. Asig thing will be well. How do you advise gary cohn as they get into the negotiating . The further you can get it down, the better off we will be. The more deductions you put in there, the worse it will be. Would love to see them get rid of state and local tax deduction. That will be silly. Others are silly as well. Thereby appeasing some of the people looking for revenue losses in the short run. I think they can do a lot of that. There may be other things to democrats. Reduction orrate Corporate Tax rate reduction. Carbon taxes, i would never vote for as a standalone but they are less alone less bad than income taxes. God bless them and let them do it and lets go for it. We really need Economic Growth badly. You incredibly positive about this . We can tell you are enthusiastic. At 77, i do not get excited anymore. Bring it back to a could be the ultimate sticking point. I know you believe this could be negotiated. The democrats can come on board. Have seen divisions over what is best here. What do you think will be the most difficult thing to negotiate . Know. O not i think the 20 person corporate rate 20 corporate rate is the minimum they could cut that and i think they could go further. . What about earnings abroad we do not really have a sense of what the rate should be. What is your sense of what it should he . They will distinguish theyn liquid investments and investment equipment. They were the rates are alone a for you bring the money back and you get some out of those rates. The key thing here is to make sure it keeps going. Starts to come back and we become the tax haven of the world. Now. Chu were the only country since 2000 that has not cut the Corporate Tax rate. Ares from 18 or 19 , but we the only ones and we have gone from the seventh highest in 2000 two the highest Corporate Tax rate and it is no wonder the people are leaving the country. This will bring them back. They can be proud they can have a taxco they will be proud of. Do you agree . It is hard to imagine a tax code you can be proud of but yes, i think it is a big improvement. I support paul ryan 100 percent. , the the most humane way death penalty. There are not a lot of death penalties that are humane. The former reagan Economic Advisor, thank you so much. Now in our from the close of trading, just under one hour. Lets get a market check with taylor riggs. Taylor it all comes back to taxes. If you record highs on the s p 25, our record, the closing record with my 508 back on september 20. Sincest to a here september 11 when the s p rose more than 1 or with the nasdaq, looking at closing record of 6461. Here we are 6470. Some good green on the screen here. Looking at the small cap companies, these companies are set to outperform. These are more domestic companies. Rest ooking at the the russell 2000 and the s p 500 smallcap index. I want to carry that through here. You are looking at the smallcap over the largecap index ratio here. With the inflation rate here. Of course you are seeing them, together. You are seeing an increase in that white line. Much. Nk you very a check of the headlines on the first word news this afternoon with mark crumpton. Mark Senate Republicans have scrapped the latest attempt to repeal obamacare. President trump is not giving up. He said he would negotiate with democrats to see of they could work out a better plan . When asked when whether he was fired, secretary tom over allegations the Student Government funded private jets for personal travel, the president said we will see. Videos. Navy has released , more than two dozen ships and troops will eventually land there to help distribute aid. Power is still out too much of the island. The crisis there worsens by the day. The National Hurricane says maria has regained strength and become a hurricane once again and lingers off the coast of North Carolina. 75 Miles Per Hour with higher gusts higher gusts. Off labor of Workers Union called for a strike to protest government corruption. Called for a strike to protest government corruption. It has been seen as a bold new step yet again. Doing nothing would be a tacit endorsement of unethical and criminal behavior. Yesterday, federal prosecutors in new york announced three Top High Schools were promised payments of as much as 160,000 using money supply by adidas to attend he does University Sponsored by global news way four hours a day global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. I am mark crumpton. This is bloomberg. I am mark crumpton. This is bloomberg. Aims to cut the Corporate Tax rate by 20 and limit the rate, which many Small Businesses rely on, to 25 . Of course, individual taxes as well. All this is meant to boost the bottom line for companies. What to the proposed changes let me start with you can are for companies, especially multinationals that make money overseas is some way to bring the cash home. It is sitting out there. President trump says he wants to bring the money home. Regardless. The question is the Interest Rates are so low right now they borrow at rockbottom rates and get done what they need to get done. They already brought the money home through the bond market. You have got apple, microsoft, have billions of dollars stashed overseas. Even wish even with the reductions in the tax rates are now being proposed with the repatriation tax probably going 10 , it is still a lot higher than what they are able to are on the bond market. It raises the question of first of all with a do this and second all, wouldnt they just go and buy back those bonds . They can raise me a levels. Multinationals out there have operations aboard that perhaps would like the money to come back. Overseas. 3 trillion for some companies, that is something they want to see. With a green back, or invested in operations . We are hearing it might be mandatory. There might he a shift to a where companies can be taxed for all of the problems in all of the business in the u. S. They would still be taxed on it so it reduces the benefit of having the money exactly. This might be part of it as well. A lot remains to be seen. , today, it is where the investeds, whether you probe or push it up to shareholders in the form of extra dividends and buybacks. To the extent there will be financial engineering, that is already happening through the debt market. I agree. That is the question. For the companies you recovering, the pushed back really hard. What are they looking for . What what battle are they fighting . They are worried in some way somehow, details are still very details around how they will pay for it because it is a just going to be a tax cut or real reform Going Forward . I think the retail lobby is still on edge about will happen. It is a wimp a win for them Going Forward. They start to see how it goes. Lisa abramowicz and matt. That is why i am skeptical this will be a simplified tax code. You are never skeptical. Im shocked. L ahead, just moments away. We will bring you the comments in that presentation. How exciting it we will bring you that life. Picking thisiastic up. This is bloomberg. We are waiting President Trump in indianapolis. Ant to bring in court Kevin Cirilli and bloomberg pass reporter laura davidson. The president has been making comments to reporters throughout on day speaking specifically the negotiating point, and the starting point. Start about the context there. The president said it is nonnegotiable. The tax rate he settled for saying of course the 15 was an opening bid. Describing this as a middleclass miracle. The white house trying to portray this out what thisint is an corporations receive arguing this tax plan will hurt the larger corporation. Is this going to be down to donald trump, whether it is the narrowing and reduction of the number of tax rates here, the potential for congress to add in a higher tax rate if he wants to appeal to the middleclass and , whatis the wealthier do we hear from him in terms of details . I do not think we will hear more details on what death and what we have heard in the past 24 hours from reducing the number of tax brackets to three, to potentially lowering raising to 12 for more tax cuts to them. We havent talking about it for weeks now with revenue neutrality. Some that have to taxes will not be discussed. The big question is how they will pay for it. When you look at the calendar ahead in the next couple of months, everyone has middecember for raising the debt limit. Deal theyhe budget had passed to its democrats, the dealer had done from middecember. The president got a big win today. Chairman mark had called for they will not tire they will not tire the wonky process known as reconciliation. I spoke with a senior aide earlier. Unity on tax reform. Republican in young tax reform to known will make too much about that deficit reduction. There is no cost estimate for tax or basel or will we know of so far. Isnt that causing waves among republicans . Next, they will have to either vegetables out, what tax breaks will we get rid of . It will hurt particularly businesses in the district, realtors, homeowners, all of those things have to be on the table as they will be able to deliver on the race they set out to do, which is really ambitious. The Business Community loves this plan. Means there are always winners and losers and you have to give a little to get a little. How important will donald trump himself be . It is a guideline. Just in terms of bringing people just in terms of bringing people together within the gop . Trump has left a lot of the decisions left to the Senate Finance and ways and Means Committee to make those choices. Travel comeback connect the end of the year. We must get this done. Here is the file word. Middle tax cat cuts, many argue tax cuts on the wealthy were the fastest and best way to encourage invest in boost gdp. See more of an admission that middleclass tax cuts need to be a priority and the tax cuts on the wealthy need to be put on the back burner . Yes and no. The Corporate Tax rate is something that will be a nonstarter for negotiations are we heard that from the president echout echo him i would this is plutko do or die in edge of the 2018 elections. There were talks earlier when the president first became the president. He wanted to keep having big rallies across the country and the his pitch directly to American People and his base. We have seen them having more Campaign Style rallies. This today is what you will see. More of what is to come. Take thet see him healthcare pitch as to recognize he and and advisers would have liked. While correct in asserting the is notnt himself necessarily writing line for line tax policy and legislation, a pitchir top seller man, so to speak, for the policy and republicans heading into which will clearly be a referendum on his ability. Eclipsedre has so far them. If they cannot get tax reform thisor something past, would be perhaps a devastating 02 record heading into the midterms. Audience while were waiting, to what doent
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