Submitted by Taps Coogan on the 3rd of January 2018 to The Sounding Line.
Legendary investor and forecaster Martin Armstrong recently gave an interview discussing the impact of the recently passed US Tax bill. Mr. Armstrong notes:
“As soon as it passed (the tax bill) I had to run over to Brussels for emergency meetings, then London… The press here doesn’t realize it has set off kind of like a panic internationally. You have the German industry yelling and saying ‘Hey we can’t compete with the Americans at this stage. You have the same thing going on in Britain, Asia…’ People don’t realize but American companies and citizens are taxed on worldwide income. The only other country that does that is Japan… I testified before Congress back in ’86 before the House Ways and Means Committee, when we were talking about tax reform back then and I explained ‘Look the corporate tax rate is crazy. It’s got to be brought down to 15%.’You’ve got to match at least what Hong Kong does and back then it was like ‘How come no American got any contracts to build any of this construction in China.’ I said ‘because they can’t compete.’ A German company goes in there and does it and is not taxed back in Germany and if a German citizen goes over there to work to make the project they don’t pay any income tax. I said ‘you guys want income tax on every quarter someone finds in a parking lot. You are not competitive.”
“First of all the major players who create jobs is really the small business. It is (the tax bill) fantastic for them and the big business, fine yes, some of the big corps, they’ll bring back the money and they’ll do buybacks. Now who owns the stock? Pension funds. So what will they do? They will only have to re-invest it in other companies.”
The interview goes on to discuss much more, including Mr. Armstrong’s outlook on the Eurozone and US stocks, so please enjoy the full interview below.
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