Champagne down pennsylvania avenue. There are only two places where americas popping champagne; the white house and the corporate boardrooms including trump tower. The gop tax scam is about bleeding the middle class dry to pad the pockets of Corporate America and the wealthiest 1 . Paul joining the panel, Wall Street Journal columnist and Deputy Editor dan henninger, columnist kim strassel and Mary Anastasia ogrady and Editorial Page writer kate odell. Why did they succeed on taxes when they failed on health care . Right. That is one question, because you would expect a failure to make it harder to succeed. But i think here the Health Care Failure really focused the minds for the gop that, for them, it was do or die for their majority in 2018 to get a tax bill passed. And it wasnt always clear they would choose do. [laughter] but also i think there was a rougher consensus on what a tax
something to behold from both directions. [laughter] paul some of its phony, i must say. [laughter] i would say so too. But what look, the Important Message that has come out of this is i think both sides have wondered at times be theres value in working with each other. And what this has shown is that there is value. That the entire party benefits. So those republicans who have been a little wary of this president , theyre still going the go after him when hes off course, but i i think some of them were worried that, you know, it wasnt to their benefit to work with him at all. Theyve changed their mind, and donald Trump Realizes theres no benefit of calling Mitch Mcconnell and paul ryan a bunch of establishment phonies. They can get stuff done. Paul and not a single democrat, kate. How do you explain that . Well, i think in some sense the party has moved left since 1986 when democrats helped write the the 1986 bill. Not alone just pass it. You had bill bradley from new
and you dont want to be hostage to that prettily. Well see next politically. Well see next year. Democrats are relying on Opinion Polls because the press has been very negative about this. 17 of people think theyre not going to get a tax cut. About 80 will. And as that develops over the course of next year, i think attitudes towards this bill are going to change, and democrats are going to be standing there saying we were against the whole thing. Paul all right. Still ahead, as company like at t, comcast and wells fargo react to the gop tax plan, well take a closer look at its Economic Impact in 2018 and no matter how the markets change. At t. Rowe price. Our disciplined approach remains. Global markets may be uncertain. But you can feel confident in our Investment Experience around the world. Call us or your advisor. T. Rowe price. Invest with confidence. The morning walk until. It. Wasnt. Dont let Type 2 Diabetes get between you and your heart. Even if you reach your a1c goal you are still at risk for heart attack or stroke. Talk to your Health Care Provider today about diabetic heart disease. And find out more at heartoftype2. Com. Your heart and Type 2 Diabetes. Make the connection. Music yea, you can be the greatest you can be the best you can be the king kong bangin on your chest you can beat the world you can beat the war you can talk to god while bangin on his door you can throw your hands up you can beat the clock you can move a mountain you can break rocks you can be a master dont wait for luck
republican tax cut, promising theyll create jobs and bring entrepreneurs back to the United States. Scott hodge is president of the Tax Foundation which released its analysis of the bill this week. Among the highlights, over the next decade the plan will boost gdp by 1. 7 , raise wages by 1. 5 and add 330,000 new jobs. So, scott hodge, welcome. Good the you back. Thank you, paul. Pallone im looking paul im looking at that Economic Impact, and, you know, its not all that large, and its not as large as some of the predictions, your analysis of some of the proposals as opposed to this final legislation. What happened in the end to reduce your expectations . Well, paul, there are really two economic stories here. Ones the long term, and the other is the short term. And as you know, so many provisions in this bill have been sunset after about seven years that the longterm prospects for growth are quite small. And youre seeing it there in those results. Thats really the result of only cutting the Corporate Tax rate. Now, in the short term because we have five years of temporary full expensing for capital investment, we are seeing a great deal more growth. And that is, in fact, we see the economy growing instead of 2 growth, about 2. 42. 5 growth over the next couple of years. So really unless we see a lot of those temporary provisions made permanent, were going to see a lot of this taper off at end of the next decade. Paul okay. But as you know, congress is always elected every two years, a new congress, so they can do what they want with the tax cold, and i guarantee you they will. Sure. Paul but if youre saying some of those provisions like expensing, if thats extended, then youre going to get the greater growth in the future too. As a good example of that, we modeled this plan as though it were permanent and found it would boost the longterm level of the economy by 4. 7 . Paul okay. So about three times what we got because of all the temporary provisions. So theres a great deal of promise here if all of its made permanent. Paul okay. One of the reasons they didnt make it permanent is they had to fit the numbers inside that tenyear Budget Window that congress has concocted for itself. Exactly. Paul so they can revisit this policy and extend those if need be. I want to talk to you about some of the criticisms leveled at this bill, one of which is that this is really a tax increase on the middle class as nancy pelosi says. Is that true . [laughter] no. In fact, everybody gets a tax cut in the middle class. In fact, even the liberal Tax Policy Center brookings said this plan will knock over four million people, low income people, off the tax rolls, increasing the amount of nonpayers to about 48 of all filers. Thats incredible. That means, actually, this plan is much more progressive than what the left is owning up to. Paul okay. Now, people also say, well,
look, the business Corporate Tax cuts here are permanent, but the middle class tax cuts go away, therefore, it favors business. Well, as you know, lower Corporate Tax rates eventually translate into higher productivity and higher wages. Theres a ton of Economic Research to show that thats true. And so were actually showing that wages will rise by at least 1. 5 , probably even more as we go on through the next decade. Paul all right. Another criticism, is this an incentive as the Washington Post wrote for businesses to move capital overseas because of the new, basically, a minimum, corporate minimum tax . Goodness no. I think that the 21 Corporate Tax rate will be a tremendous incentive for companies to bring a lot of those activities back. In fact, i think itll bring a lot of activity from foreignowned companies to the United States. I think the people that ought to be worried here are the politicians in germany and
france and japan who have extremely high Corporate Tax rates now. Weve leapfrogged over them from becoming one of the least competitive countries to now one of the most competitive tax systems in the entire world. Paul in fact, theres a study out of germany from last week that suggested exactly that, and i suspect youre going to the see germany and france and maybe other countries cut their Corporate Tax rates as well to stay competitive. Now, the other big criticism thats leveled here is the deficit. Its basically saying, you know, its a 1. 5 trillion formal number that they allowed under the tax bill to increase the deficit. And some people say its going to be much larger than that because of the sunsetting Tax Provisions that we discussed earlier. Whats your response to that . Well, even with a modest Economic Growth that our models suggest that this plan will generate, its going to generate about 5 trillion worth of new gdp over the next decade, and
thats in turn going to produce about a trillion dollars worth of new tax revenues or for the federal government. So the overall cost of this plan will call from about 1. 5 trillion to less than 500 billion. Thats 50 billion a year in order to get 5 trillion worth of new gdp. I think thats a pretty good trade. Paul but is there a chance that, in fact, it could actually generate more revenue, if we get growth up to 3 for two, three, four years, its going to be even higher than that. Yes. Especially if theyre made permanent, we are going to see growth continue, and thats all good for federal treasury and the economy. Paul thank you, scott, appreciate it. When we come back, despite strong sign that is the gop tax bill help the economy, polls show that americans are less than enthusiastic about the plan. So can republicans sell it to voters ahead of the 2018 its all popculture trivia, but it gets pretty intense. Ahh. The new guy. Whoa, he looks he looks exactly like me. No. Separated at birth much . We should switch name tags, and no one would know who was who. Jamie, you seriously think you look like him . Uh, im pretty good with comparisons. Like how progressive helps people save money by comparing rates, even if were not the lowest. Even if were not the lowest. Whoa wow. I mean, the outfit helps, but pretty great. Look at us. What this represents is a promise that each and every one of us made to the American People last year. It is a promise that is kept today. We have a simple message for our republican friends republicans will rue the day they passed this bill, and you can bet democrats will make sure of that. Paul republicans and democrats on capitol hill spinning very different tales of tax cut. So how will the Bills Passage Play Out in 2018 . Were back with dan henninger, kim strassel, kate odell and Wall Street Journal columnist william mcgurn. All right, dan, can republicans sell this thing, and what do they have to do to sell it . Well, its not as though theyre trying to sell merely an idea. They have passed an enormous tax
reform, the entire tax code. They have reduced tax rates, indeed, on the middle class, on corporations. Youve got perhaps 2. 5 trillion of overseas money being repatriated back to the United States. The economic effects, i think, are going to be pretty significant, and theyre going to have to wait until at least mid year to see whats happening. And then theyre going to have to be able to cite that as a result of what they did in passing this bill. Against that we just saw tax Chuck Schumer saying this is a disaster. There is an almost mindlessness to the democrats opposition on this bill. Theyre the ones who presided over less than 2 growth for eight years of the obama years. Youve come up to the possibility of rewriting the tax code, and they say we will not participate not only will we not participate, they have no alternative other than to oppose what is going on. Paul paychecks in february withholding will increase, kate. Presumably, that will help if you actually have a job and you
get more takehome pay. But why is the bill so unpopular now . Well, i mean, weve had Press Coverage that, as weve discussed, has been very skewed, and people perceive theyre getting a tax increase when theyre not. And, yes, well sort that out in february. I think also it must be fun to be Chuck Schumer and get to predict armageddon and have no one hold you accountable when it happens paul or if it doesnt. Excuse me. The left is making this Argument Corporations have said, hey, were going to give 1,000 bonuses to some of our employees, and the left saying, hey, whats 1,000 . That tells you more about the worlds they live in than it does the gop. Paul pretty extraordinary, at t, 1,000 bonus for 200,000 employees, comcast for another 100,000 employees. A lot of companies starting to do this. And the response is, oh, well, you know, who cares . Thats just p. R. , well, a 1,000 check, elle take it. Right. I think that gets to the real
question for 2018. Its not the political question. A lot of people that would normally vote democratic put donald trump in office because they thought he was going to recover the economy in some way and make their lives better. And the question is whether they feel that. And this 1,000, for families or, you know, for a mom or dad saying this might be a new tv or Piano Lessons for someone, its really foolish, i think, to dismiss. And if you look at the democratic i mean, the party says their stuff, but you were a Football Player in college. This is the 12th man on the field is the crowd, the press, the coverage of the tax cuts. Victims of trump tax cuts and so forth, its just its mindboggling. Paul go ahead, kate. No. I was just going to add these bonuses that were seeing, theyre the icing on the cake. What we have been talking about for several months is when you cut Corporate Taxes, you spur investment and make workers more productive. That is what leads to longterm wage growth. Not that companies decide to
give away more money that they keep directly at the end of the year. Paul and yet, kim, we have often seen in some midterm elections which usually help the opposition for the party in the white house, sometimes a faster economy, faster growth doesnt necessarily translate into votes if the president himself is up popular. Unpopular. So thats still a risk here for the republicans. Correct. And the time frame here is short in that, look, this bill will have some immediate effects. Weve seen that from corporations. And it will help longterm growth or longerterm growth. How quickly that kicks in and the sense of wellbeing that a growing economy leaves with people and they connect that to a president who on a daily basis often manages to offend people. We just saw what happened when you had the president and his poor Approval Ratings hanging around the neck of ed gillespie who was the republican running for governor in virginia, and he
lost and lost fairly badly in a state that, you know, should have been getable. So this is, i think, the bigger question is can the republicans running in the midterms run on that tax success without necessarily running hip and hip with an unpopular if he still is at that point . Yeah. And its going to affect politics next year. The republicans talked about wanting to Reform Medicare and social security. Mitch mcconnell said at the end of the week im not doing that unless i have democratic support, taking a big piece of legislative activity off the table. Paul all right. Still ahead, deputy fbi director Andrew Mccabe grilled on capitol hill this week. His testimony reportedly raising more questions than answers as republican lawmakers get set to republican lawmakers get set to issue new
republicans did or did not learn about this infamous dossier and the fbi and dojs use of that in their decision to launch a Counterintention Probe into President Trump. Paul this is the steele dossier, the socalled steele dossier. The steele, yes. That was commissioned by the Democratic National committee and the Hillary Clinton campaign. Mccabe was asked about what they did, and he was at great pains to stress all the efforts that the fbi and doj went to corroborate some of the allegations in it. But whats interesting here is, apparently, in the end he had to admit that the only thing that they could find in it that was true was that a trump satellite operator, carter page, once traveled to russia. Nothing else. So i think that raises more questions because if they couldnt find anything true in it, were they nonetheless still using it as part of a probe or
as a justification for getting wiretaps on Trump Campaign officials . Paul and carter page has admitted he took a trip to moscow. Right. If this is the only thing they had, then the question is what did they use, if they used it at all, in the application for a fisa warrant . Paul which is extraordinary. Just step back for a second. They basically asked a court, if its true, based on a dossier commissioned by the Opposition Campaign to have the fbi able to spy on a president ial campaign. Which almost a year and a half later the assistant fbi director canner verify only one fact, the travel fact about page . Its really outrageous. The house, other committees are becoming involved, oversight, judiciary, and they need to see the fbi files. Theres a file in this case, they need to see those files. The other larger question is the more the investigation goes on, the more the questions are about the investigators. It doesnt mean that bob muellers dishonest, but when he first assembled this team, we
were told these are strict professionals. Theyre entitled to their opinions. We have an fbi agent whos supposed to be a counterintelligence Guy Squawk