Well, it didn’t take long for the Street and Democrats to weigh in on the “details” (or lack thereof) found in the leaked GOP/Trump tax plan.
Stocks fell pretty much immediately after the 9-page document (which has some fun graphics and sports an aesthetically-pleasing color scheme) started making the rounds, but let’s reserve judgement on the equity reaction at least until we get the official unveiling.
As for the analyst feedback, the early consensus seems to be that any news is good news.
“Investors [should] take a step back and evaluate why the Big Six are releasing the tax framework,” Height Securities’ Stefanie Miller says. “The blueprint’s purpose isn’t to set final policy details, but rather to advance the process and give Freedom Caucus Members cover.”
Goldman seems to agree. “Tax reform is finally starting to move,” Jan Hatizus writes. “This was supposed to be more of a wish list than a final document,” KBW’s Brian Gardner offered, in an effort to drive home a similar point.
And then there was Cowen’s Chris Krueger who isn’t as optimistic. “The devil’s in the details, with no explicitly detailed offsets and no revenue/deficit number,” he chides, before mockingly noting that “the low bar was met, as 9 pages tops the 5-paragraphs released earlier this year.”
That echoes our initial reaction which you’ll recall was as follows:
While it’s certainly a step up from what we got in April (i.e. the bullet point, big font, wide margined, double-spaced, one-pager that looked like it walked out of a high schooler’s Trapper Keeper), I’m not sure it counts as “comprehensive.”
No revenue number makes the rest almost an academic exercise. [I still] believe nothing will pass on taxes this year or next.
And then there were the Democrats.
“It’s clear from this plan that when it comes to tax reform, Republicans will always put the wealthy first. After more than a year of work, Republicans have only managed to produce a nine-page document without any of the significant details the American people deserve to know,” Rep. Richard Neal, top Democrat on House Ways and Means Committee said in a statement, adding that “in our meeting yesterday at the White House with Ways and Means Committee members, President Trump promised that under his tax plan, ‘the rich will not benefit.’ It’s clear that only a day later, Speaker Ryan and Leader McConnell have already broken that promise.”
Sen. Ron Wyden, the top Democrat on the Senate Finance Committee took things a step further, saying that “if the Republican blueprint for tax reform is about middle class, then Trump Tower is middle-class housing.”
“Lack of detail for the middle class guarantees that average Americans will be the ones hit with shrinking paychecks and higher tax bills,” Wyden went on to say.
Finally, here’s Pelosi:
This gives away the store to the wealthiest, while sticking the middle class with the bill. Make no mistake: after Republicans’ tax plan blows a multi-trillion dollar hole in the deficit, they will sharpen their knives for Social Security, Medicare, Medicaid and vital job-creating investments for middle class families across America.
Or, in language that Trump would understand: “the ratings aren’t great.”