Chad appeared on Fox News to discuss some of the implications of the new tax bill that comes into effect on 1/1/2018.
Fox News:There’s something else that’s coming up this new year the new tax code. You know, we’ve heard a lot about that after President Trump signed the sweeping tax bill into law earlier this month. Well our next guest has some tips on how we can all make the law work for us let’s bring in Chad Brownstein CEO of Rocky Mountain Resources joining us now.
So Chad, I mean right now the average tax refund is like they say over three thousand dollars how do you think people can maximize this you know for next year. What do we do?
Chad: You got to benefit your business. When you have a corporate tax rate of 21% and the ability to buy things and depreciate it immediately, your business is what’s going to drive it if you own a small business and if you own a large business you’re going to be busy buying capital equipment so it’s time to buy in America.
Fox News:Well what if I don’t own a business like I don’t own the business. I’m just sitting here working a paycheck like everybody else how can that benefit us?
Chad: If you’re an individual, the current tax rates has been lowered to benefit you so you’re going to have more capital to spend on household goods and durables. You also have cheaper gas prices because the oil companies basically got a tax break out of this through the ability to depreciate assets.
Fox News:Oh, I’m sorry to interrupt, are they going to really pass that low that on us as opposed to you know have more profits.
Chad: Well, what you’re going to see is that the oil and gas companies are going to directly benefit the consumer because the taxes at the pump are going to be less for them allowing them to put more money into drilling which is going to create more of an abundance in America which is going to ultimately benefit the individual person who’s at the pump by having a lower gas price.
Fox News: Wow I mean and but what about the criticism that this is a giveaway to the rich especially to the corporations and that all this stuff is going to expire in you know eight years or so.
Chad: Well what I’ve seen is that there’s going to be a chance for laborers and unions to advance pay raises with the tax cut comes the ability for the labor unions to get stronger to say you as a company have more profits you got to pass that down to the partners who helping build these companies so ultimately, I believe this is actually a tax cut for the middle class and really not much more than that as far as super benefiting a segment of the population.
Fox News: Do you think it really will accelerate growth as the president claims?
Chad: I think there’s no doubt about it. If you look at the ability to buy a good have it depreciate immediately as opposed to 30 years specifically capital equipment and infrastructure, you’re going to see a lot of buying out in the oil patch you’re going to see buying out in the infrastructure world where I live I know I’m buying trucks and cars that I never would have acquired or invested in my properties and assets particularly in the mining space because now you get the benefit of a full tax refund on the capital cost and that’s going to allow you to put money into projects. There’s basically an ability for companies to finance assets without going to third parties so it’s a very smart thing to grow this economy.
Fox News: Well, I got a d-minus in accounting in college I got an F that’s why transferred from undergraduate Business School to the college so you kind of lost me there, but I do know one thing.
You’ve got to prepay those local taxes like you only have a few more hours is does that really work, there’s some question about the IRS on pre paying property taxes a lot of folks have been doing that rushing out of the local tax office.
Chad: Yeah, well there’s a little confusion about it and I believe that no one has the real answer yet. You can never hurt prepaid they can never hurt pre-paying taxes because you’re going to get the benefit of the long-term value of investing now but nobody really knows at the moment.
Fox News: All right well a lot of people have prepaid to try to take advantage of next year. We’ll see what happens like if you listen to your accountant or H&R Block or TurboTax whoever does it. Happy New Year Chad, good to see you.