By Alan Murray and Geoffrey Smith
July 26, 2017

Good morning.

President Trump gave an interview to The Wall Street Journal that went beyond his usual pyrotechnics with the press and deserves some attention. A few takeaways:

Taxes. The President said he hopes to get the corporate tax rate down to 15%, while also cutting taxes for the middle class. And he says he’s willing to see taxes go up on the wealthy. “If there’s upward revision, it’s going to be on high-income people.”

Corporate tax reform is the Holy Grail for business, and the reason many corporate leaders are still hanging with him, despite concerns about his anti-globalization, anti-trade and anti-immigration policies, and his general non-businesslike approach to governing. When he talks about raising taxes on high-income earners, my guess is he’s thinking of residents in high-tax states like New York, where the loss of the state and local tax deduction could offset any benefit from lower rates.

But putting together a tax reform bill that meets those goals and still complies with congressional budget rules is a monstrous task. As I’ve said before, tax deals are built around economic interests, not political ones. And building a tax reform coalition in Congress without any support from Democrats is like assembling a royal flush from half a deck of cards.

Apple. The President claims Apple CEO Tim Cook “promised me three big plants – big, big, big…. I said, Tim, unless you start building plants in this country, I won’t consider my administration an economic success, OK? And he called me and he says, you know, they are going forward, three big, beautiful plants. You’ll have to call him. I mean, maybe he won’t tell you what he tells me, but I believe he will do that. I really believe it.”

No comment yet from Apple. But if the company is able to repatriate some of the $200 billion-plus it has stashed overseas at a favorable tax rate, anything is possible.

Federal Reserve. The President said he likes Janet Yellen and he likes low interest rates, and he didn’t rule out reappointing her. When asked whether his economic adviser Gary Cohn—who was sitting in on the interview—is a candidate for the job, Trump said: “He doesn’t know this, but yes, he is.”

More news below.

Alan Murray



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