How Hil­lary plays the class war­fare card

The Trump Plan isn’t trickle down eco­nom­ics

The Washington Times Weekly - - Commentary - By Stephen Moore

Hil­lary Clinton keeps bash­ing the Trump tax plan as “Trumped up trickle down eco­nom­ics.” This class war­fare card has be­come the stan­dard and tired re­sponse to ev­ery Repub­li­can tax plan re­form for 30 years. No won­der we haven’t cleaned out the sta­bles of the tax code since the Rea­gan era. Democrats have no in­ter­est.

Hil­lary’s claim is that the plan will blow a hole in the debt (which is rich com­ing from some­one who worked for an ad­min­is­tra­tion that nearly dou­bled the debt in eight years) and that the ben­e­fits all go to the rich. She also says it will cost jobs and could even “cause a re­ces­sion.”

I worked on de­vis­ing the Trump tax plan with economists Larry Kud­low, Sam Clovis and oth­ers, so I know a lit­tle bit about the costs and the ben­e­fits. It’s an amaz­ing ide­ol­ogy which says that let­ting busi­nesses keep more of their own money will cause the econ­omy to cap­size and other hor­rors, but a $1.5 tril­lion tax hike on busi­nesses and in­vestors will, as Hil­lary prom­ises, cre­ate jobs. Yes, and in­ject­ing Elmer’s glue into your veins is a good way to pre­vent a heart at­tack.

Let’s start with her claim that the plan will cost $5 tril­lion. That’s wrong. When tak­ing into ac­count the higher eco­nomic growth from the lower tax rates on busi­nesses and work­ers, the plan’s “cost” is about half that size. The Tax Foun­da­tion finds the plan will raise the GDP growth rate by al­most one per­cent­age point over a decade, and that means lots of jobs and ad­di­tional tax rev­enue for the gov­ern­ment. The best way to bal­ance the bud­get is to put Amer­i­cans back to work.

The $2.5 tril­lion “cost” of the tax cut can and will eas­ily be made up by cut­ting gov­ern­ment spend­ing. Over the next decade the gov­ern­ment is ex­pected to spend al­most $50 tril­lion. Surely with sound busi­ness-like lead­er­ship, we can save 5 cents on the dol­lar.

Next, she says that tax cuts have never worked to re­vive the econ­omy. We be­lieve that cut­ting taxes for 26 mil­lion small busi­nesses will be a huge in­cen­tive for more hir­ing and ex­pan­sion by busi­nesses that are now taxed at as high as 40 per­cent. The Amer­i­can En­ter­prise In­sti­tute finds that the big­gest ben­e­fi­ciary of a busi­ness tax cut is the Amer­i­can worker, whose wages will go up from more cap­i­tal spend­ing. If a truck­ing com­pany goes from 50 trucks to 75, that’s 25 more truck­ers it will need to hire.

Hil­lary needs a tax cut his­tory les­son. GDP “Sup­ply side” tax rates were at the heart of the Rea­gan eco­nomic plan in the 1980s. The Rea­gan ex­pan­sion with lower taxes was twice as pow­er­ful as the ane­mic Obama re­cov­ery with higher taxes and more gov­ern­ment spend­ing. The dif­fer­ence in the two re­cov­er­ies is near $3 tril­lion in lost out­put. Sim­i­larly, the John F. Kennedy tax cuts got us five and six per­cent growth. JFK was right: the best Busi­ness In­vest­ment Me­dian Wages way to raise rev­enues is to “cut tax rates now.” Even Hil­lary’s hus­band Bill Clinton agreed to a cap­i­tal gains tax cut which led to a gusher of new fed­eral rev­enues.

Next, Hil­lary claims that only the rich like Don­ald Trump will ben­e­fit from this “Trumped up” tax plan. She ob­vi­ously hasn’t read the tax plan. By de­sign, the tax rate re­duc­tions for the rich are off­set al­most dol­lar for dol­lar by the loss of $250 bil­lion a year in tax de­duc­tions for rich peo­ple. So the over­all tax bur­den of most mil­lion­aires and bil­lion­aires is not changed. Al­most all of the ben­e­fit in dol­lar terms from the tax plan goes to the mid­dle class (and own­ers of small busi­nesses). We think they de­serve a break from a decade that has wiped out fi­nan­cial sav­ings of the mid­dle class. With Oba­macare pre­mi­ums ris­ing by 10 to 30 per­cent in many states this year, fam­i­lies need the tax cut des­per­ately.

The ta­ble shows that the Trump tax plan causes a rise of af­ter-tax in­come by about $4,000 for the av­er­age mid­dle class house­hold, while the Hil­lary plan shrinks in­comes.

What Hil­lary isn’t telling you is that she and her lib­eral friends are against tax cuts, be­cause they want to spend the money on free … ev­ery­thing. This in­cludes the sil­li­est idea of all time: hun­dreds of bil­lions for 500 mil­lion so­lar pan­els. Get ready for a cas­cade of dozens of new Solyn­dras. How much money is go­ing to go to Elon Musk from this cor­po­rate wel­fare give­away. It could be in the tens of bil­lions of dol­lars.

So just who’s poli­cies ben­e­fit the rich and the po­lit­i­cal class?

Hil­lary is of­fer­ing the Amer­i­can peo­ple trickle-down gov­ern­ment.

When has that ever worked? +20–24 per­cent +7–8 per­cent +7–9 per­cent Stephen Moore is a Fox News con­trib­u­tor and a se­nior eco­nomic ad­vi­sor to Don­ald Trump.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.