QUESTION: Why do you paint the left/Democrats as really being Marxist?

OP

ANSWER: Marx is the one that started the entire focus on the class warfare. Keep in mind that Marx began his position with socialism – not communism. It was the Commune Movement in Paris that persuaded Marx to adopt communism, which was the surrender of all property.

The reason I call the left Marxist is that this is where the class warfare begins. This philosophy did far more than simply invoke class warfare. It instigated the entire belief that government could manage the economy and eliminate the business cycle. John Maynard Keynes also followed that segment of Marx taking the position that government could control the business cycle. Therefore, both Marx and Keynes shared a common belief that the government could eliminate the business cycle. Towards the end of Keynes’ life, he relented that he had fought against the business cycle and Smith’s Invisible Hand, and came to realize he was wrong.

QUESTION: Mr. Armstrong; Did Donald Trump take your Tax Reform Proposal you submitted to Congress back in the nineties?

RK

ANSWER: I know a lot of people have been asking that since his original corporate tax rate was 15%. What I can say is that the notion to eliminate deductions for State income tax has been bantered around for a long time. I believe that was added to the reform and was not actually Trump’s plan initially out of the gate.

What you have to understand is that if California gets 13.5% and Alabama is 5%, the States have seen this as welfare for California and other high taxes States. Their residents get to deduct that money and it is really a welfare check for the State. To make it fair, there should be NO deduction for State income taxes. That will then force the local politicians to be respectful of other people’s money perhaps for the first time in history.

This is why I knew it would be time to move to Florida where there was no state income tax. I cannot tell you how many friends from New Jersey have already called and want to move their businesses to Florida asking how hard was it.

While the American press keeps pushing the class warfare along with the Democrats, outside the USA there is a major panic taking place on a grand scale. I have been called into meeting in Europe and even in Asia all deeply concerned about the loss of competition with the United States due to the Trump Tax Reform. Naturally, the American press would NEVER tell the truth how cutting the corporate tax rate will upset the powers that be around the globe.

A German study warns that its economy will be among the losers in the face of the Trump Tax Reform, which they warn will fuel the tax competition between America and Europe, but also the study leader, Christoph Spengel from the Economic Research Institute ZEW, came out and told Reuters:

“In addition, competition between EU members for US investment will increase; Germany is the loser.”

German Industry is already screaming. They want the Solidarity Surcharge terminated. That was put on for the unification and was never lifted, as is always the case. Without the surcharge, the German corporate rate would be 28.2%, still well above the EU average tax rate of 20.9%.

To finance the reunification of Germany a surcharge, the government taxed all taxpayers on their income tax withholding and corporation tax. The assessment basis was the income tax or corporation tax. This became known as the Solidarity Surcharge and is currently 5.5 % of the relevant assessment basis. Therefore, the effective corporate tax rate in Germany has been 33.7%. Of course, the Solidarity Surcharge is no longer is really needed to pay for the unification. But as always, once a tax is imposed, the government just can’t let it go.

The taxation levels in Germany were always much higher. When I was working on corporate restructuring helping companies select where to set up inside Europe for the birth of the Euro, I never placed any manufacture in Germany. I sent them to Britain for the net tax was 40% less. If they did not need skilled-manufacturing labor and just the best tax rate, I put those companies in Ireland. Never did I recommend anyone to move to Germany or France.

The advice I gave to those in a position to put the counter-reform in motion was straightforward. I advised them to ELIMINATE income tax completely. The political cover should be that they are adopting the original structure of the United States whereas only indirect taxation was permitted prior to 1913. A few mouths dropped. But they underst6ood the advice I was giving if they really wanted to compete.