President-elect Donald Trump could be exactly what the US needs to reform its taxation systems and therefore boost the US economy, says the boss of one of the largest accounting firms in the world.
KPMG global chairman John Veihmeyer said in an interview with Business Insider that Trump’s focus on reforming tax and regulation is already causing a spurt of optimism from the business community and that will have a major impact on US economic growth.
“I hate to keep using the word uncertainty but frankly, considering there is a huge period of uncertainty for the world [with Brexit and populism rising] I think there is a lot of optimism at the moment for some areas — such as the US,” Veihmeyer told BI.
“For years, the US has talked about how we could get more use out of the tax and regulatory environment and under the Trump administration, the prospect of meaningful tax reform is very real. The US is poised for significantly higher growth. We certainly believe there will be tax reform as it’s a high priority. It is also a cause for major optimism amongst business leaders across the US.”
But another area that is causing a split amongst economists is over Trump’s protectionist trade plans.
At the beginning of December, Trump said the US should view trade “almost as a war” and vowed to implement protectionist policies. He said that his administration would renegotiate trade deals and “defeat the enemy on jobs. And we have to look at it almost as a war, because that’s what’s happened to us.”
“That’s what’s happened to our workers.”
According to an HSBC report entitled “Unlocking the Growth Potential of Services Trade” released earlier in December, if Trump goes ahead with his protectionist trade plans (coupled with a “hard Brexit” which is when Britain leaves the EU without a trade deal) the combination could kill $1.2 trillion of global trade value.
But Veihmeyer is willing to be a bit more optimistic and wait until we hear about more finalised plans from Trump.
“A lot remains to be seen where the US is going to head on trade policy but President-elect Donald Trump has identified, what I believe are incredibly bright and talented people in key roles, such as commerce [Wilbur Ross],” he told BI.
“I remain cautiously optimistic on growth and one of the areas that needs major investment is infrastructure, which will continue to be a real inhibitor to economic growth but a stimulus would be tax reform and regulatory changes. This potentially could be a major factor to higher growth [in the future].”
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