Advisors Magazine Issue 77

Can Trumponomics Work In The Real World?

In the arcane financial world of Trumponomics it’s business as usual. For example, the Trump Administration has a plan to eliminate the “carried interest” deduction. That particular, deduction will allow managers of hedge funds and private equity funds to be taxed at the capital gains tax rate (15 percent) instead of the income tax rate (39.6 percent, according to published reports. Yes, they are getting away with murder. Trump also plans to reduce the deficit by cutting waste, cutting an estimated $500 billion in waste to get rid of the present budget deficit. In fact that is a 12 percent reduction in the $4.147 trillion carry-over budget from Obama Administration. Indeed, these are painful cuts. Then there’s the gutting of the Department of Education and Environmental Protection Administration. The net savings: An estimated $69.4 billion, maybe, while reallocating some of those funds to state block grants. In other words, Trump is gutting the whale.