• Economy

7 days of Economics: First setbacks for President Trump

Jean-Luc Proutat
Jean-Luc Proutat
Economist
  • Obamacare repeal-and-replace plan has failed
  • “Massive” taxcuts are nothing more than campaign promises so far

Donald Trump might not have read Montesquieu’s “The Spirit of the Laws”.The source of the idea of the separation of powers, Montesquieu’s thinking might also have inspired a few late night tweets for the US President. Because nothing, oral most nothing, happens in the United States without Congress’ approval. Forced to withdraw his star proposal to repeal and replace the Affordable Care Act (Obamacare), President Trump has just learned the hard way. Even though he enjoys a Republican majority in both the Senate and the House of Representatives, the Grand Old Party failed to reach an understanding on the proposed replacement, which was too radical for some, and not radical enough for others. 

A misstep that announces more to come? Indeed, there hardly seems to be more of a consensus overthe “massive” tax cuts promised during the campaign. The tax cuts are not only unfunded (through equivalent spending cutbacks), but some create unfair competition. Thisis the case for the proposed border tax adjustment, which would exclude export earnings from the taxable income of companies, a proposal that divides Corporate America as much as it does the members

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