Norman Ture’, who died in 1997, could be considered the godfather of contemporary supply side economics. He was the under secretary for tax and economic affairs under President Reagan and is recognized as the main architect of Reagan’s 1981 tax cut legislation. In almost every area he would be a big supporter of President Trump’s tax reform plan, particularly on the issue of expensing of investments made by business, a proposal he championed throughout his career. But there is one aspect of the President’s proposal where Ture’ would profoundly disagree. This is his proposal to eliminate the deductibility of state and local taxes from one’s federal taxes. Here’s what Ture’ had to say about this issue:
People should be taxed only on the income over which they retain control and of which they enjoy the benefit. If one taxpayer gives revenue to another, either voluntarily (as by gift or charitable donation), or due to legal obligation or government coercion (alimony, fines, taxes), the donor should deduct that revenue from his or her taxable income, and the recipient should add that revenue to his or her taxable income.
Without a doubt Ture’ would have seen this aspect of the Trump plan as a money grab to try and offset some of the other cuts in the plan and a deviation from sound principles of tax reform.
By the way, he would also be unhappy with the fact that the Trump plan inexplicably makes no attempt to eliminate or eve reduce the tax on capital gains.
