The Time Machine

Imagine you had a time machine and could go back to 1986. Congress was discussing a sweeping bipartisan tax reform plan. Billions in deductions would be eliminated in favor of lower rates. The debate was intense. Fast forward 25 years. Why are House Republicans opposing this?

Corporate tax rates are being cut while special subsidies are being eliminated. Personal tax rates are being lowered somewhere between 6 and 12 percent from current levels. Social Security and Medicare would be shored up through changes in their inflation adjustments. A Republican Senator with strong anti-spending credibility has helped put the proposal together. And a Democratic President has signed on.

This sounds and looks like the tax reform plan President Reagan got through a Democratic House 25 years ago. President Reagan is an icon in the Republican pantheon. House Republicans are now opposing a Reaganesque supply-side initiative. The irony is overwhelming.

Economist Gary Becker outlined the needed components of a solution to our fiscal mess over a year ago: slower entitlement growth; lower tax rates on a broader base; and long-term economic growth, supplemented by regulatory, educational, and immigration reform. What’s needed now isn’t rocket science, but vision and leadership.

“Without a vision the people perish.” And without leadership, nothing gets done.

Douglas R. Tengdin, CFA
Chief Investment Officer
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By |2017-07-17T12:35:04+00:00July 20th, 2011|Global Market Update|0 Comments

About the Author:

Mr. Tengdin is the Chief Investment Officer at Charter Trust Company and author of “The Global Market Update”. The audio version of each post can be heard on radio stations throughout New England every weekday. Mr. Tengdin graduated from Dartmouth College, Magna Cum Laude. He received his Master of Arts from Trinity Divinity School, Magna Cum Laude and received his Chartered Financial Analyst (CFA) designation in 1992. Mr. Tengdin has been managing investment portfolios for over 30 years, working for Bank of Boston, State Street Global Advisors, Citibank – Tunisia, and Banknorth Group. Throughout his career, Mr. Tengdin has emphasized helping clients manage their financial risks in difficult environments where they can profit from investing in diverse assets in diverse settings. - Leave a comment if you have any questions—I read them all! - And Follow me on Twitter @GlobalMarketUpd

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