Trump’s Gaza Plan Is Brilliant

Plus, Apollo’s Mark Rowan takes up the carry-over basis banner

President Trump and Prime Minister Netanyahu at the White House on Tuesday evening in a still from the White House video feed.

Leave it to President Trump to take a grim situation—Hamas terrorists, Israeli and American hostages, rubble—and reimagine Gaza as “the Riviera of the Middle East.”

It’s a win in so many ways.

For any noncombatants in Gaza, they get to escape the hellhole and restart their lives elsewhere. Many of them would happily voluntarily do that. Until Egypt closed its border with Gaza, anyone who could in Gaza was paying $5,000 or $2,500 to be smuggled out through Egypt. Describing this as “ethnic cleansing” or forced displacement is not accurate; the plan is more to provide the Palestinians with refuge or allow them to escape without having to pay a fee.

For Israel, they get the U.S. on their border instead of hostile Hamas terrorists.

For the U.S., they get a strategic position on the Mediterranean coast with beautiful beaches, great weather, and proximity to tourist destinations in Egypt and Israel. The military could move Central Command headquarters there from Qatar. There are overland transportation possibilities—railroads, pipelines—that could be an alternative to the Suez Canal to convey energy and goods from Asia to Europe.

Jokes abound about the real estate development potential, but it is no joke. As Trump’s first-term ambassador to Israel, David M. Friedman, put it, “25 miles of sunset-facing Mediterranean beachfront. Assuming an average of 1000 feet of frontage per project, that would permit 132 major multi-hundred million dollar developments along the beach. Between construction, management and service jobs, that’s enough economic horsepower to employ hundreds of thousands of people.” U.S. Middle East policy is headed toward David Friedman and away from Tom Friedman.

For Egypt, they get the U.S. as a neighbor instead of hostile Hamasniks.

For Jordan, Saudi Arabia, and the United Arab Emirates, they get Hamas and its Muslim Brotherhood ideology soundly defeated rather than emerging strengthened and victorious and with control of Gaza.

Some worry that an influx of Palestinians could turn Egypt or Jordan into Hamas states. But the authorities in both those countries are no pushovers. Turkey, which might conceivably be a troublemaker, is broke. Hamas’s other Sunni sponsor, Qatar, will be under new pressure to shape up. The only big losers will be any Hamasniks who prefer to try to stay in Gaza and fight rather than surrender or leave.

And this is just the beginning. Asked about Judea and Samaria, also known as the West Bank, Trump said he’d have an announcement in the next few weeks. There, too, the trick will be seeing past the grim present to the possibility of a brighter future—not in a naive or utopian, Shimon Peres, “New Middle East” sort of way, but in a creative, pragmatic, practical, capitalist way. A peaceful Middle East in which Israelis and Americans are customers and partners of Arabs rather than combatants has the potential for real growth and prosperity—but only in the context of a decisive Israeli victory that crushes any hope that the Jewish state will be eliminated.

The Jews have learned from experience to be cautious of messianism. One step at a time. But another experience of the Jews—and one shared by Americans, including President Trump—is that ideas that at first seem fanciful sometimes actually do become reality.

Carry-Over Basis: Apollo’s Mark Rowan, passed over for the Treasury secretary job, has nonetheless “become an increasingly influential voice on economic policy in President Trump’s orbit” pitching a detailed tax and spending reform plan, Andrew Ross Sorkin reports in the New York Times. The plan involves a 15 percent corporate tax rate and a 28 percent top income tax rate, with capital gains taxable at ordinary income rates. The 28 percent top rate was the one that was in place at the end of the Reagan tax cuts.

One part that made me chuckle was this, from the Times interview with Rowan:

You get rid of the “step up basis at death,” a provision that erases capital gains in a deceased person’s portfolio and values everything at the date of death, which most Republicans wouldn’t like.

I like that we allow a generation of entrepreneurs to build wealth and to keep their wealth and to keep more of it. But when they die, they don’t get to pass it on tax-free. That feels incredibly American to me.

Here is an April 19, 2005 editorial from the New York Sun (“A Capital Idea”), explaining why eliminating the death tax together with also eliminating the step-up in basis at death is an approach that makes sense: “the current step-up regime creates perverse incentives for investors. The older they get, the more incentive they have to hang on to assets they might otherwise be well advised to sell off, simply because the step-up system will reward them for holding by providing a way to avoid capital gains taxes.”

It’s nice to see Rowan and the New York Times discovering this New York Sun idea two decades later.

Beyond the arcane tax policy fine points, the bottom line is that there’s a potential here, too, for a policy outcome that is way, way better, certainly more ambitious and less incremental, than anything that is widely expected.

Cooper Union: Judge John Peter Cronan of the U.S. District Court for the Southern District of New York issued an opinion and order in the case of Rebecca Gartenberg and a group of other Jewish students at Cooper Union. Judge Cronan offers a memorable summary of the events on that campus:

On October 25, 2023—just a couple weeks after Hamas’s attacks—around one hundred students staged a walk-out that was punctuated by chants like “resistance is justified when people are occupied,” “it is right to rebel, Israel go to Hell,” “there is only one solution: intifada revolution,” and “from the river to the sea, Palestine will be free.” And Jewish students later found the phrase “from the river to the sea” scrawled in Spanish on a bathroom stall with lettering that resembled the font used on the front cover of Mein Kampf.

But the worst occurred hours after the October 25 walk-out. At about 4:00 p.m. that day, the demonstrators stormed into the Foundation Building, shoving past the campus security guards. After first attempting to locate Cooper Union’s president, the mob descended on the building’s library, where a group of students wearing recognizably Jewish attire were sheltering behind locked doors. The demonstrators surrounded the library and proceeded to bang loudly on the library’s doors and on its floor-to-ceiling glass windows, shouting demands to be let in and continuing to direct anti-Israel slogans and waive [sic] a Palestinian flag at the Jewish students inside the library. During the roughly twenty-minute ordeal, Cooper Union’s administrators did nothing to disperse the protestors and instead directed law enforcement to stand down, even as the college’s president had just escaped the building through a back exit. None of the protestors subsequently faced any discipline….

The Court is dismayed by Cooper Union’s suggestion that the Jewish students should have hidden upstairs or left the building, or that locking the library doors was enough to discharge its obligations under Title VI. These events took place in 2023—not 1943—and Title VI places responsibility on colleges and universities to protect their Jewish students from harassment, not on those students to hide themselves away in a proverbial attic or attempt to escape from a place they have a right to be.