Trump's tax plan will pass despite resistance from big business: Analyst Peter Boockvar
U.S. consumers are feeling pressure on their wallets with costs and interest rates rising, and that makes a convincing case for President-elect Donald Trump's proposal to cut income taxes, analyst Peter Boockvar told CNBC on Friday.
"I think the personal income number yesterday was disappointing, the spending number was disappointing," The Lindsey Group's chief market analyst told "Squawk Box."
Boockvar was referring to the Commerce Department report for November's personal income and spending. Personal income remained unchanged from October, while spending edged up 0.2 percent.
"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, making the case that Trump's plan will pass Congress despite trade-related risks for large companies.
"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," he said. "The whole 'border adjustment' thing is getting [to be] a big deal."
Border adjustment refers to the way imports and exports are taxed. A tax reform blueprint written by House Republicans suggests that products should be taxed based on where they are consumed, not where they are manufactured.
It also proposes that U.S. exports do not get taxed and imports coming into the country do.
"From a company standpoint, the border adjustability is a big deal for them," Boockvar said. Multinational retailers like Wal-Mart that import many of their products are worried that taxes on imports will outweigh their profits, forcing them to raise prices on consumers.
"Wal-Mart is at the head of the class in lobbying against this," Boockvar said.
Stifel Wealth and Investment Management's Hans Olsen said corporate lobbyists on Washington's K Street could generate enough resistance to the tax overhaul to slow it down.
"What he hasn't run into yet is K Street, and when you start monkeying around with tax deductions, tax rates, cherished items that vested interests have, you run into a wall," Olsen told "Squawk Box."
"Because K Street, the lobby class, starts to spool up, and they will slow things down. I think that's the risk," Olsen said.
Independent consultant Alison Deans told CNBC she's concerned that the market rally since the election is based on a lack of clarity about Trump's plans.
"It's been a bit of a Goldilocks attitude towards what's going to happen coming out of the policies he's stated, and so at these levels, I'd be concerned," Deans told "Squawk Box."
"No matter how you look at it, it's looking expensive in an environment of uncertainty," she added. "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."