Manafort indictment casts doubt over Trumpís tax reform plans

By John Crudele
October 30, 2017 | 11:47pm

How can Paul Manafort hurt your wealth?

President Trumpís former campaign chief was charged in a 12-count indictment that included tax fraud, money laundering and ó the most interesting one of all ó ďconspiracy against the US.Ē

Also important, a Manafort business associate named Rick Gates was also charged in an indictment that was unsealed on Monday. Both men surrendered to authorities.

Details of the charges havenít yet come out, but Manafort ó who managed the campaign for a short while ó was known to be a target of the investigation by Special Counsel Robert Mueller.

The broader investigation is supposed to be about Russian meddling in the last presidential election and things connected with that. Nobody at this point knows whether Manafort can give Muellerís investigators anything that might imperil the Trump administration and its goals.

Charging Gates as well might mean that this is about bad business practices.

The lack of clarity is what could be important to investors, especially as it relates to the tax reform measures now working their way through Congress.

There is already opposition to tax reform, which ó in its first iteration ó would reduce the number of tax brackets, give companies a break and, it seems, shift some of the burden to higher-income individuals.

Overall, tax reform is being billed as a break for Americans.

But in order to pay for those tax breaks in an era of huge government deficits and US debt exceeding $20 trillion, there need to be offsetting cuts in some current, very popular tax deductions.

The tax changes need to get as close to revenue-neutral ó meaning they donít cause a great increase in the US deficit ó as they can be.

Details of the tax bill under consideration are being kept under lock and key by Republicans in Congress. The House Ways and Means Committee is scheduled to reveal the House version of the tax bill on Wednesday.

Although the details havenít been released, there is already powerful opposition to the bill from home builders and the National Association of Realtors, who fear tax deductions for mortgage payments and state and local taxes may be eliminated or made less attractive.

With all that going on, the indictment of Trumpís first campaign manager is more than just a distraction. If the object of the probe becomes larger than just questionable business dealings by Manafort and either Trump or his relatives are implicated, at the very least, tax reform will be stalled.

At worst, tax reform might not happen as Washington waits to see whether Trump can survive.

The stock market has been bubbling since before Trumpís election ó and one of the main reasons Wall Street feels encouraged is that investors think something will be done to change the tax laws to benefit companies, increase their profits and justify higher stock prices.

If Manafortís current predicament causes enough disruption, Wall Street might take a second look at current stock prices and then take a little, or a lot, of air out of the bubble.

For the record, I donít think Manafortís business dealings endanger Trump. But I do think Republicans, who already donít like the president for many reasons, might take advantage of the indictments ó and gang up against him.

In that case, chaos in Washington will put the Wall Street bubble in peril.