Washington, DC -- (ReleaseWire) -- 08/12/2016 --BENNETT: Gerard Lameiro is an author, philosopher, economist and an engineer. He was founder and CEO of Lameiro Economics LLC, a company focused on bringing practical economic knowledge about freedom, economic growth, and prosperity to America and the world. Lameiro is also the author of four books. The first one is Great News for America. The second is Renewing America and Its Heritage of Freedom. The third is Choosing the Good Life and the fourth is America's Economic War. Clearly, he's a logical choice to discuss Trump and Hillary's economic tax programs. Gerard, welcome of Financial Myth Busting.
LAMEIRO: Thanks for having me on. I really appreciate it.
BENNETT: Donald Trump made public his team of economic advisors this week to make America great again, and he's going to be unveiling more of this on Monday in Detroit at an economic group there. Among the 13 men on Mr. Trump's list are hedge fund managers, bankers, real estate investors, a steel executive, and a fracking tycoon. Absent are the names of any women, and any well known policy experts, save for one economist with a doctorate, and a tax policy expert. Looking at his team, do you think he actually has got good people surrounding him?
LAMEIRO: Well I know a lot of fairly good economists have been advising him during the primary season. People like Steven Moore, Larry Kudlow. Those are well known names associated more with the supply side, more with free enterprise, free market economics. That plus what I've seen at a high level of Trump tax plan would indicate apparently a pro-growth agenda. Just as he announced his list to the Supreme Court of potential justice nominees that appeared to be strikingly conservative, I think that's also true of his tax plan, the kinds of things he has mentioned appear to be pro-growth from most points of view.
BENNETT: Trump's pitch has long been that the billionaires of the business world know how to save the middle class here in America. Do you think that the advisors that he chose reinforce that idea?
LAMEIRO: Well I do not know a number of them personally. I'm more familiar with the economists, because that's where a lot of my work is done. So I would say I presume they are. I don't know to be honest. I have not vetted them. I did vet the Supreme Court nominees. I went through each of their bios in great detail, and I can attest to the fact that they were definitely constitutional conservatives. I can't say the same for his economic team to be honest with you.
BENNETT: I know you recently wrote a column comparing and contrasting Trump's tax plan with Hillary's. I was wondering if you could describe in general terms what Hillary's tax plan looks like. I read this week she plans to raise taxes approximately about 1.3 trillion, yet the deficit, of course, is still projected to increase. I'm not certain how that's going to continue to bend like it has for the last eight years. But maybe you can give us some insight.
LAMEIRO: Yes. Well I think you can summarize both plans in two words. Her plan is simply to raise taxes, and the Trump plan, the two words are cut taxes. They as about as opposite as you can get, and that's worth noting, especially if taxes are an issue that you consider important. So to give you the overview you're asking for, in terms of income taxes she would raise the personal income taxes by capping itemized deductions about 350 billion dollars. This is over a ten year period. Corporate taxes, we're looking at an increase of 275 billion. Although as far as I can find I don't know how precisely within the tax code she would do that particular tax increase, there was not a lot of detail I could find.
Then in addition she has a 400 billion dollar, what's called a fairness tax change. There would be a fair share surcharge, and again, not defined very clearly in my view. All I can think of is fair share, it sounds like we're going to tax the rich somehow, and somehow add that into the general fund so that they can spend more on other things. Then there's the issue of taxes on carried interest. I don't know, usually most shows I'm on people are not familiar with carried interest, we could always talk about that. But basically it has to do with investment funds, and your being an expert in investments you would know all about that, some of your listeners might not.
Then of course death taxes. She'd certainly not lower them, and might raise them. In terms of capital gains she would not only increase capital gains taxes, but also the brackets associated with them. In terms of what I could best determine there isn't a firm estimate on how much revenue that would generate. I imagine they're using a static analysis. I, by the way, believe in dynamic analysis because I think it's more accurate.
BENNETT: I agree.
LAMEIRO: Another thing, she would create a new tax on stock trades. That means that people who buy and sell stocks are going to pay some percentage. You might think of it almost like a sales tax on stock trades, but it would be some type of tax on stock trading. Then a new creation, the exit tax, which has to do with businesses who earn income overseas. She would not touch the currently high corporate tax structure and that, but she would add on this new exit tax. In addition, she has also endorsed, or said she is open to, a 25 percent national gun tax. I'm sure the NRA will love that one. And a high soda tax, which is interesting.
BENNETT: Because we know it's about sugar, right. Are candy bars going to be taxed? Are my M&M's going to be taxed?
LAMEIRO: So I actually got a letter from a listener wanting to know if her diet root beer was going to be taxed.
BENNETT: Do you think that Hillary's tax plan is going to be superior to Trump's, or vice
LAMEIRO: Oh no. I am definitely pro economic growth, which means I look toward a low tax regime, a low regulatory regime. I look for things like a monetary policy that results in a stable dollar. I much prefer Taylor's traditional approach, the economist Taylor at Stanford, and use the Taylor rule, or something similar, as opposed to quantitative easing and ZIRP, zero interest rate policies.
BENNETT: I think the problem that I'm having with Trump, is that whenever he is asked about what he'll do with taxing and spending he talks about hiking taxes on the rich too. Are you at all worried that his tax plan on paper isn't something he is actually committed to, and that it's more of an attempt to win Republican votes?
LAMEIRO: Yes. Well I do not endorse either candidate. My personal point of view is I would like to see pro-growth, and a solid constitutional conservative in there. We do not have such a person currently running that I know of, unless possibly the libertarian and that. But I think Trump is somewhat of an unknown quantity, and he doesn't have a real defined track record in either economics, or virtually any other area of the government, and Clinton does have a record which I don't particularly like. I think her long term record is not pro-growth. I would expect more progressive socialist type programs and policies, and I think that's already doing a bad number on our economy. I think we have the weakest recovery in decades, generations, and I think this tax plan would probably result in literally trillions of dollars that would not be met with her budget expense that is likely to occur.
So I'm for fiscally restrained policies, I'm for things that would, for example, moderate the corporate taxes, which I think are doing a number on our economy. I would pull back regulations, like getting rid of ObamaCare, because I think that has hurt small business growth. I would say a little bit along the lines of what William Buckley used to say years ago when he was active in that. He said you always vote for the more conservative person, or his opinion was you vote for the most conservative. So I think when people go to the polls and vote I presume they will evaluate each candidate on the issues that are most important to them, and pick the one that's closes. I don't know for conservatives if there's an ideal candidate running this year.
BENNETT: You recently wrote a piece arguing that Donald Trump's ascendancy signals the end of the Republican Party. I thought that was interesting. I mean he is such a divisive figure. Do you view this as a good thing, or a bad thing?
LAMEIRO: Actually I wrote the book Great News for America, so I thought it was great. The reason is this. I went back in 2015 because I thought that this election coming up in 2016 was going to be a profound presidential election. I had a sense by looking at numbers, looking at all sorts of things, and being in touch with people all across the country. Because I do about 400 TV and talk radio shows a year I hear a lot of peoples opinions, and a lot of callers too that call in. My sense, going back to 1789, and looking at every big presidential election, this was going to be a giant election, and I saw a lot of change coming. Yet, I didn't think that was bad, I thought it was great.
If you go back, I'll take one election as an example. 1896, William McKinley. That election was preceded by terrible economics. We had in the prior three years about 15,000 bankruptcies, we had law and order issues, we had the Pullman Strike, we had all sorts of things. People were rioting at the time. They did not know if America could survive 1896. They did not know if America could make it into the next century. The American people came out in a record voter turnout, it was an enormous turnout, not a turnout like we're used to seeing by any means. They went, and they shook up the parties, and it started the 20th century on a whole different note. The similarities of the great presidential election versus the typical presidential election, were major. In my book, Great News for America, I identified what that model is, what does it look like when you have a great presidential election.
I wrote the book last year, it came out in the beginning of January. Right before the primaries and caucuses started I made ten big predictions. One of them was the fact that this would be a historical and critical presidential election, and by historic I mean record high voter turnout, which we've seen in the primaries, and also critical in the sense that the political parties would be realigned. Their support groups would change, their leaderships would be shaken up, the parties might even change names, and I suggested names they might get. So I went through and did these ten predictions, and so far they're all coming true.
BENNETT: Interesting. Besides, of course, the political parties renaming themselves, realigning, and the historic record high voters turning out for this, you made some other shocking forecasts, that might spark some interest in our listeners. Can you list out a few more?
LAMEIRO: Well one, you might have a few people listening from the mainstream media. I predicted the end of the mainstream media's impact on presidential elections this year with this election. I saw the business models breaking. Business models is one of the areas I put a lot of time into over the last decade or two. I saw the business models as breaking up on the mainstream media. The layoffs at different news organizations, the changes, the impact of the new media, the impact of talk radio on television even. By the way, look at the Olympics, at NBC's ratings, how they're at a 12 year low this year. But at any rate, yes, I saw a major impact. By the way there's a very interesting thing I discovered about presidential elections. That is any time there is a great, or a critical and historic presidential election there's a change in the media. It's fascinating. But the change in the media helps to drive the change in the political parties, and the political system. It's amazing.
BENNETT: Is it a good change, or is it a bad change?
LAMEIRO: Well you could debate that I suppose. I would say it has always been a good change, because the American people tend to take more control of the country, and get what they want. So if you're a democratic advocate, and I say democratic in terms of having the people involved in the government, it's a good thing. You look at 1828, Andrew Jackson.
BENNETT: One thing I thought was fascinating is when you said how the American people could actually change the media, hopefully, to be much more honest and accountable for what they put out in the public. Because right now there's no accountability. They can put whatever they want out there, and they put it out on the internet, and everyone believes them, and a lot of the stuff is just made up.
LAMEIRO: Yes. Well there are a lot of issues around the mainstream media, there's quite a bit of debate in that. But the American people are ultimately in control, and that's a theme within the book that I wrote, Good News for America. I think they pursue whatever media they choose, and they're pursuing the new social media with quite an energy level where people put a lot of their personal time into it. But we see the rise of talk radio, clearly conservative. There are about 2,500 talk radio hosts in the United States, which is rather incredible when you think of how many stations you can get in an area, in a market. So that's one particular area. Another one, by the way, I don't think I mentioned earlier, another prediction was the end of the Democratic Party as we know it. I think you're seeing that as well. I think it's going to be a different party. I think you saw the rise of Bernie Sanders. I think it's over. Were it not for super delegates, and if it were not for the DNC putting their thumbs on the scale, so to speak, in Hillary's favor, I think Bernie would be the nominee.
BENNETT: I just can't imagine that.
LAMEIRO: I mean, look at all of the elections he won. But that said, if the Democratic Party morphs into the progressive socialist party, which might be a more appropriate name, or into say an outright socialist party, the equivalent of a European style socialist party, that also means that in likelihood we're talking one to two generations of the Democratic, or whatever the new version of that party could be called, being out of the White House, and being relegated to a minority party status.
BENNETT: Interesting. You know we're beginning to witness almost a sea change out there in the world where people are actually giving up on politicians to solve all of our problems. Of course I'm talking about how Spain voted to solidify its right of center party's hold on its government, and of course, when Britain decided to flee the European Union. Do you think we could finally be starting to learn from them?
LAMEIRO: Well, I don't know if we're learning from them. They may actually be learning from us. It works both ways. This is a global zeitgeist. I like that word, zeitgeist, from the German, meaning the spirit of the times. There is an anti-government spirit of the times. Look at the Philippines, they elected someone much like Trump. He says some rather strange things sometimes. But it's that populism, that anti-government, anti-establishment. By the way, people talk about anti-establishment. The issue with our parties, it's not so much anti-establishment as it's they're not happy with the parties, period. It isn't that they're in power, those particular individuals, it's that the party hasn't been delivering. There was a landslide house election in 2010. 63 house seats changed hands to the Republicans.
In 2010, you remember that was the year that we had ObamaCare, that it came into effect. People were sending people back to get rid of ObamaCare, they didn't want it. 2/3 of the American people were against ObamaCare, but it was passed anyway. 2014 we had a historic senate vote that was conservative, and Republicans took over the senate. Both times after both of those elections, which was a clear signal to the Republican Party what was wanted by the American people, they did not act. That's why this had to be another historic election, because they were going to deal with this at the presidential level now, and that's what's happening.
BENNETT: You're predicting a big Trump win this November. Are you still confident Trump can win?
LAMEIRO: Unless he absolutely decides not to, which he could. But in terms of the dynamics, the numbers, everything that's going on. I look at voter momentum, I look at voter intensity, I look at all sorts of things. Everything that I see right now is a Trump landslide. I know the polls don't agree, but I think the underlying models of the polls aren't right, they're not accurate. If Gallup is still doing what it said it was going to do last December it doesn't even want to get involved in this election. Because they're so worried about, I think, how to accurately forecast it. So I would say yes, I expect a Trump landslide, unless Trump decides to lose it and throw the election.
BENNETT: Great News for America is Gerard's book. It's on Amazon. Thanks.
For over a quarter century, Dawn Bennett has been successfully guiding clients through the complexities of wealth management. Her unique vision and insight into market trends makes Bennett a much sought after expert resource with regular appearances on Fox News Channel, CNBC, Bloomberg TV, and MSNBC as well as being featured in Business Week, Fortune, The NY Times, The NY Sun, Washington Business Journal in addition to her highly regarded weekly talk radio program - Financial Mythbusting. Through prudent and thoughtful advice, Dawn Bennett has strived to consistently provide the highest quality of guidance.
About Dawn Bennett
Dawn Bennett is CEO and Founder of Bennett Group Financial Services. She hosts a national radio program called Financial Myth Busting http://www.financialmythbusting.com.
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