Subject: WSJ: Highlights of Donald Trump’s Interview on Taxes, Debt and the Fed
From: "Roberts, Kelly" <[email-masked]>
To: Comm_D <[email-masked]>
Date: Tue, 10 May 2016 10:25:27 -0700

Sarge sent around article version earlier. Some direct quotes below. Won’t say who his economic advisors are.

Highlights of Donald Trump’s Interview on Taxes, Debt and the Fed<http://blogs.wsj.com/economics/2016/05/10/highlights-of-donald-trumps-interview-on-taxes-debt-and-the-fed/>

Donald Trump, the presumptive Republican presidential nominee, was interviewed by The Wall Street Journal on Monday. Mr. Trump discussed his views on fiscal and monetary policy and attempted to quiet jitters over remarks he’s made in recent days suggesting he would renegotiate U.S. debt in an economic downturn and saying rich people might pay higher taxes. Here are highlights, lightly edited for clarity and length.

ON MR. TRUMP’S TAX PROPOSAL

The Wall Street Journal:  And are you going to be changing your proposal?  I’ve heard some talk that you might alter some of the — they key features of it.

Donald Trump:  Always possible to change.  I always believe in flexibility and remaining flexible.  It’s going to change anyway because when you start negotiating the plan, you know — although [President Barack] Obama would use executive orders, right?  But when you start negotiating the plan, there’s always going to be give and take, but this is the proposal and it’s been very well received.

WSJ: How should the public and the voters know what your core beliefs on taxes are?

Mr. Trump:  Well, my core beliefs are I want a major tax cut, and I’m only being honest with people.  You can’t just say, “This is what my plan will be,” and you know, you have to get — you have to negotiate this with many other people and those many other people are congressmen and senators, etc., and you know, everybody knows that you have to do that.  So — but I put in a proposal that’s the biggest tax cut of anybody by far and — but I also know there will be give and take, because it’s something that has to be (inaudible) negotiated.

WSJ:  What makes you think that Democrats will be willing to negotiate on this when they say taxes should go up on high income people not — up not down, just less than you want them to go down?

Mr. Trump:  Well, they may go up on high-income people, based on my proposal.  In other words, at the proposal level, not at the — where they are now level.

WSJ:  Right, but Democrats want to start with today and raise taxes from that.  What makes you think that they’ll say…

Mr. Trump:  Well, it’s — like I said there, it will be give and take and they’re going to want other things having nothing to do with this.  And they’re going to want things having absolutely nothing to do with this but that they’ll consider important.So, it’s all very — it’s one very big, very complex proposal into a negotiation.

ON TAX BREAKS

WSJ: What tax breaks on high-income people should go away?

Mr. Trump:  Well, we’re getting carried interest taken out.  I’m taking the carried interest out.

WSJ:  Right, but those people would still be able to reduce — I mean, they’re paying 23.8% now and they’d pay 15% in the…

Mr. Trump:  It would be carried interest.

WSJ:  Right, but they’d pay 15% because they’d be business income.

Mr. Trump:  You’re right.  Depending on what the final deal is. But what I’m going to do and what my priority is going to be is business and middle income.

ON U.S. TAX RATES

Mr. Trump:  No. 1, you — you do have to reduce taxes and — you know, again, we’re the highest in the world — highest taxes in the world.

WSJ:  Well, we’re highest tax in the corporate rate, but I mean, overall, taxes are…

Mr. Trump:  But — well, I’m saying corporate rate, we’re the highest.  And — and if you look — and the other thing that has to be done is simplification.  You look at tax returns today and — and you know, you have to be — you have to be No. 1 in your class at the Wharton School of Finance [at the University of Pennsylvania] to understand what’s going on.  Honestly, it’s — it’s a ridiculous situation with the complexity and what they’ve allowed to happen.

WSJ: And so in that negotiation [on taxes], what’s your red line? What are the things that you couldn’t give up on?

Mr. Trump: I never talked about a red line. I never talked about a red line. You don’t know. You may give up on certain things that you wouldn’t think of now, but you’ll get something in other negotiation having to do with another subject. So you really can’t talk about a red line. You don’t know what that might be.

ON U.S. DEBT

Mr. Trump:  I’m only saying you can buy back. Look, this isn’t a real estate deal where you can go in and buy out a mortgage at a big discount because the market crashes, OK?  This is the United States government.  The bonds are absolutely sacred.  But when you can do, and all I said, is that you can — I’m surprised this has been getting — has this been getting a lot of publicity?  I haven’t…

WSJ:  Yes, in the financial press, sure.

Mr. Trump:  Oh really?  I’m surprised because I think it was clear.  I’m saying if interest rates go up, you can buy debt at a discount on the market — just on the market.  You just buy back debt on — at a discount.

WSJ:  And so the U.S. government should spend its money to go buy back its bonds and…

Mr. Trump:  Well, if they can make good deals.  If they can buy the — if they can buy the debt back at good deals, you could buy it back in the market. And if rates go up, you’ll always — you’re always given that opportunity.  But no, I’m not talking about negotiating with — with people that own the debt or creditors or anything like that.

ON FEDERAL RESERVE CHAIRWOMAN JANET YELLEN AND INTEREST RATES

WSJ:  And you’ve talked about replacing Yellen.  Who — what kind of person would you replace her with?

Mr. Trump:  Well, I am a low-interest rate person.  But, obviously, if inflation rears its ugly head, you can no longer — you know, you have to do something about that.  And, one of the things you’re doing about that is raising interest rates is slowing things down.

But, I am a low-interest rate person generally speaking.  But I would replace — I mean, look, she’s got a term to go.

WSJ:  Mm-hmm.

Mr. Trump: I have great respect for her.  I don’t know her but I have great respect for her.  But I would imagine that we would put a Republican in that position. But I’m somebody that — while we can do it, as an example right now, if interest rates went up, our economy is not doing well at all.

And it’s going to hurt the economy very badly.  If interest rates went up, it would be a disaster.  If the value of the dollar goes up, it would be, at this point, not a very good thing.

ON HIS POLICY ADVISORS

WSJ:  And do you know – besides [Larry] Kudlow, who else is advising you on taxes?

Mr. Trump:  We’ve got new — sorry, really good people.  I have good law firms representing me and very good people.

WSJ:  Great.  Thanks so much.  Anything you want to add?

Mr. Trump:  Thank you very much.  No.  Just — I would like you to straighten it out because somebody said they didn’t understand the debt portion of it. Obviously you’re not going to have talks with creditors.  So, it’s good if you, you know, I’m glad you called about that.  OK?