I think
the catalyst for the rise in the stock
market continues to be the enthusiasm
that really started yesterday based on
president Trump's announcement that he
was close to a deal on tax cuts and that the deal is supposed to be
announced sometime before the end of the
month.
Now of course, I've seen this movie
before. I mean Trump has come out and
made a lot of statements about a deal
being ready being on the table, gonna
happen soon and of course so far every
time he has touted this nothing has
materialized.
Yet the markets are not looking at the boy who cried
wolf, now they actually believe the
President, they think he's serious and
one of the things that he's saying that
maybe makes this more credible is that
he's saying that he's working with the
Democrats that if he can't get something
done with the Republicans he's already
working on a plan with the Democrats and
so one way or another we're gonna get
this major tax reform.
But of course it's
not really going to be tax reform. It's
going to be tax cuts based on what the
President is saying. We're not going to
reform the tax code, we're not going to
have a major shift that is going to make
the economy more productive.
The President has already said that the rich are not going to get a tax cut at
all. They may even have a tax hike. So if
you're not going to lower the top rate
if you're not going to reduce the
marginal rate of tax you're really not
going to get any economic stimulus
because
that's where the growth comes from. Where
you lower the marginal rate and you may
have a situation where people actually
work harder at lower tax rates and
produce more taxable income.
