IBD has a really good editorial this week about education spending and SALT deductions in relation to how the tax reform proposal might, gasp, make states rein in their spending.
But it’s the so-called SALT deduction that has the unions up in arms. Why? Because getting rid of it might force high-tax states — which benefit the most from the deduction — to cut taxes and rein in their own spending.
One other thing he suggested he would do: A one-time tax on repatriated overseas corporate retained earnings that are now kept in overseas accounts to avoid onerous U.S. taxation.
The estimated amount of these funds is staggering: $2.4 trillion. Even repatriating just two-thirds of that amount at 10% would add close to $160 billion to federal tax revenues.
Taken together, these form the core of an extremely supply-side oriented economic growth program that would create jobs and new incomes.
Nor is this a “tax cut for the rich,” as some have claimed.
As IBD noted last September, the “dirty little secret” of corporate taxes is that corporations don’t actually even pay them. Average Americans — that’s you — do. You pay it through lower wages, lower returns on investments and retirement accounts, and higher prices for the things you buy.
Dan Mitchell weighs in on what we know about President Trump’s tax plan(s):
Be sure not to miss Arthur Laffer’s editorial that got top billing by Investor’s Business Daily on the front page today.
Laffer Curve At 40: Why It Still Matters For Tax Rates
Wow! What an election night!
Kansas Governor Sam Brownback was re-elected Tuesday. Of course, MSNBC can’t understand this, and their shots at all supply-siders start at the top:
With the help of Arthur Laffer, the mind behind supply-side economics, Brownback shaped a far-right economic agenda for Kansas. Slashing taxes and state spending, Brownback cut corners by eliminating government jobs and clamping down on the social safety net. The plan was to kick start growth and get the state’s economy humming.
Larry Kudlow is in today’s Investor’s Business Daily:
I’ve always believed the 1990s were Ronald Reagan’s third term. And while mistakes were made over the years, the U.S. created about 50 million new jobs between 1981 and the onset of the Great Recession in 2007.
Unfortunately, the free-market model has largely been discarded in recent years — not only in the U.S., but around the world — as Keynesian spending, over-regulating, tax-the-rich redistribution, and berserk money have come into vogue. It’s all wrong. The poor results show it.
A Republican victory won’t change this. But the GOP can make an early start on free-market energy reforms, lower corporate tax rates, holding back the regulatory tide and knocking down some ObamaCare tax hikes.
Republicans can also continue the war on overspending. Since the 2010 GOP landslide, government spending as a share of GDP plunged from 24.4% to 20.3%. This has had something of a tax-cut effect, and shows what Congress can do if it has a mind to do it.
Stephen Moore uses his Investor’s Business Daily column to magnify the “Left’s War on Business”:
Hillary Clinton is getting deservedly attacked for her imbecilic statement at a Democratic political gathering in Massachusetts on Friday about business and jobs.
“Don’t let anybody tell you that, ah, you know, it’s corporations and businesses that create jobs,” she preached, to loud applause. “You know that old theory, trickle-down economics. That has been tried, that has failed. It has failed rather spectacularly.”
It may not be too surprising that Hillary can’t connect the dots that it takes an employer to create an employee to create wages and salaries.
That’s how some 150 million Americans get paid every week. Ms. Clinton has made her millions in the cattle futures market, as a government employee and giving speeches for fees of $250,000 a pop. Nice work if you can get it. The rest of us mere mortals need a paycheck.
John Tamny writes in the Investor’s Business Daily:
Yardley and Ewing naturally accept the conventional view that “austerity,” whereby politicians have less to spend, is the cause of European weakness. Of course, what they miss — and in their defense most economists miss it too — is the simple truth that governments tautologically have no resources. The latter isn’t some kind of ideological assertion, or some evidence-free libertarian slogan, it’s just fact.
And with the above fact in mind, we have to ask what drives prosperity. It’s not just success, and if it were, Silicon Valley would be very impoverished. What drives prosperity is constant, market-disciplined experimentation with new ideas.
It’s 2,000 carmakers sprouting up in the early part of the 20th century in the U.S. Just about every one of them failed, but rather than implode based on all the bankruptcies, the economy soared. Fast forward to the end of the 20th century, most Internet companies similarly went belly up, but no sane individual would suggest that the U.S. economy was set back by all the bad ideas that eventually vanished.
When businesses are forming, the economy experiences a surge of information about what works and what doesn’t such that we all benefit. Success doesn’t power prosperity, but information does.
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In short, the only European “austerity” is that which empowers politicians to allocate the always limited resources created in the private economy. The latter is a barrier to the very experimentation that is necessary for an economy to evolve in prosperous fashion.
The Wall Street Journal takes a look at Jeff Bell’s campaign for the US Senate in New Jersey.
Republican Senate Hopeful Says Easy-Money Policies Have Led to Budget Deficits
Also, Larry Kudlow writes about the damage continually being done the Kennedy name in the Investor’s Business Daily: