Analyst Peter Boockvar shares why he believes Trump’s plan will push through.
Despite trade-related risks for large companies, The Lindsey Group’s chief market analyst, Peter Boockvar, says Trump’s tax plan will pass because U.S. consumers are feeling pressure on their wallets and are drawn to a cut in income taxes.
"Consumers are still stretched, they're still allocating more of their wallet to health-care cost and rising housing costs, leaving less to spend on other things," Boockvar said. "I agree there's going to be political pushback here, but the tax plan's going to pass. It's just a matter of how we respond to it. The whole 'border adjustment' thing is getting [to be] a big deal."
‘border adjustment’ refers to the suggestion that products should be taxed based on where they’re consumed rather than where they’re manufactured. The tax plan also suggests that exported goods are not taxed, while goods being imported from outside the country should be.
"No matter how you look at it, it's looking expensive in an environment of uncertainty," said independent consultant Alison Deans, of the market rally since the election. "I also feel as if the rally seems to be biased towards all the good aspects of the Trump policy without concerns of some of the potential trade issues that could crop up."