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Larry Kudlow (CNBC, Tax Reform)

Nov 10, 2017|

Transcript - Not for consumer use. Robot overlords only. Will not be accurate.

Joining us now on the line is senior contributors CNBC Larry Kudlow. And Larry we get talked deal last week about the house roll out of their plant today we get talked about the senate plan uninterested in your first impressions of the senate plan compared to the house. Well it's interesting. My biggest piece. Is postponing the corporate rate cuts to planning ninety I think that's. Kind of a gimmick they think they're gonna save money by doing it I don't think they well the cause but there's going to be a lot of that after the court. And while mighty from our shores not gonna come at all. They don't wanna play with the higher rate they'll wait until the rate drops in toward in nineteen if it does. And I think if I wind up losing money on now. That it is an embarrassment. Expense and will be immediate. 28 and that's good that's great. But I I think they should bring forward and no gimmicks no basis to get the corporate rate down. And how has a better handle on that. Then about it. I don't step. Is that those pretty good I mean. Here's a tiny ray production through the upper end. I don't know what the brackets are gonna look like I don't think they're released media income threshold brackets so that the C. But the house is pretty good on that. They want an end to assault the state local tax deduction. Surprise you a little bit. No because I had been down there. I spoke to Republican senate record. Tuesday it's Tuesday morning I'd I'd heard. I knew that was cup. That can be processed and I have to resolve that in the conference. And do it looks better for small bit I'm not entirely sure of the details. But it seemed like. The pass throughs are gonna get a better deal. Under the united build an hour ago. I don't know the people of the title looks that way out those pre disappointing an awfully complex. So you know there's that. I the problem let you know that it's too bad. That they looked so far apart because. That means a conference right you got yup this is the chairman mark yesterday. Then it got to go into full committee and I have the Republican bill. And then they go to the floor that. And then make go into conflict. Now the floor vote. Maybe top all right still think they're gonna get a couple Democrats understand. It's gonna take longer. And I'd have these you know edit re assesses the track called vacations just drive me crazy and I really think it would be there every single day. Have their turkeys you know in Washington picket signs and just just don't leave it okay because this is only a problem and I tea. Politically. They don't get this done. All hell breaks loose you know after the digit elections go forward is not good so they have got to get this done. Larry I. This is John the question I I I know what you're talking about here in terms of 20% corporate tax rate the concern about that being delayed a year that clearly is real reform the corporate side. The feeling I get it tell me if you agree that this is the senate bill from the personal side. Feels like war but cut and reform sounded so yes seven brackets that Larry that's not the direction I thought we had. Well. No it doesn't really simple by the brackets. But it does. It actually has lower rates. Schedule that that house bill. But again I don't know what the income threshold are going to be for the brackets so that's going to be very important. But. I think there's a lot of will and determination to get this done that's what I. Learn when I was down there earlier this week and the builder you know and sound that there's similar. But they're gonna have to work out the differences like you mentioned tax reform. This data once said to repeal the gun assault and it's been party yeah where's the house I think is more pragmatic. Where they owe it to keep the property tax deduction at least up to 101000 dollars. They did that obvious because they don't wanna lose every Republican House seat in new York and then New Jersey in our budget Bayreuth district of California also. So there's some disagreements there there's a lot of our agreements. And I I think this is doable I think is very much program. Just take at this giving them of the 2019 corporate actually you know what any stated he. They've been postponed economic activity. That's bad and statins also encourage tax avoidance and shelter and that's. But these it should be resolved so I'm gonna still play this and they optimistic side. Where I tend to come out of from the same side that beat these two bills while they do have differences. I think there's there's a middle ground the can be found I tend to think it might take a little longer though nom kind of saying hey it might not the end of the year might be January or February. We have been campaign. I mean maybe right I hope not but I guess what I if they don't get it done. By the end of the year that overall people will be talking about. And you have to nervousness. And that's what everyone's going to be talking about and it'll make them look bad and it loose credibility they cannot afford to push it into next year pages cannot. And I can't do business the business community want this stuff but that. Otherwise they're not gonna pull the trigger. All the capex investments for example that's good that's immediate start up at 28 feet but I just don't think pitcher there's going to be pulled if they had not done. And that that means the whole economic growth process. Which should come this may not come she thought I mean at stake in a Belgrade just get it done stay in Washington. Larry Kudlow a and to agree thank you for you put it pretty simply there and I tend to agree that thank you very much Larry. That is Larry Kudlow senior contributor to CNBC. And I hope they get something done before the end the night. It because there's a lot of that stuff as Larry said but the one thing that we know he's simple bills is immediate expensing. On the corporate side does it is obviously unhappiness that if the way to 2019. The lower rates that expense. Very nice boost to GDP. We hear that term an awful lot what does that mean for an actual business like. Which electric capital investment. It's that it you know get him the tax benefit over a number of years you get all your ones instead of having to depreciate over five and seven years want you to you take it right there are still allow us to get that impact right away and here's the thing even if we have to wait for your 20% cut corporate rate. We 2008 get that immediate expensing eureka nice boost from that it's still always get back capex happening in year one saying look. We can do this now because that'll bring down our tax burden in this year we don't have to pay the higher corporate rate. And then. In 2019 Elvis and that Horry takes effect and we party got a growth engine. And Larry's right about the fact that it's disappointing but markets look past the valley of that twelve months ahead of the fact that 20% rates coming.