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):
From Detroit, comes another mention of Art Laffer’s newest book, a kids book he co-wrote called Let’s Chat About Economics. We mentioned this book when it came out in October, and with Christmas only 3 weeks away, maybe now is the time to get this great gift for the kids in your family. Get those kids thinking supply-side sooner, rather than later.
So it’s Christmas, and everyone is writing books for children, although most don’t deal with issues this hefty.
What sets Balconi’s book apart is her co-author — Arthur Laffer, one of the most influential economists in America and President Ronald Reagan’s economic adviser. He’s the father of supply side economics and author of the Laffer Curve, which measures the diminishing returns of higher tax rates.
Laffer’s a big deal, and children’s books aren’t his normal fare. But Balconi heard him speak at the Detroit Economic Club in 2012 and sent him a proposal. Laffer, who lives in Nashville, loved it.
“I thought it was a cool idea to touch kids in this way,” Laffer says. “It’s the basics — understanding incentives, trade-offs and other basic principles that come right from Michelle’s own family.”
Supply-side legends Lewis Lehrman and John Mueller have an op-ed in today’s Wall Street Journal on page A13.
Ending the greenback’s reserve-currency role will raise savings and make U.S. companies more competitive.
Ralph Benko: End the Fed’s War on Paychecks
Brian Domitrovic: The Obama-Reagan Comparison Does O. No Favors
Ryan Ellis: Reform Conservatism and a Smarter Supply Side Tax Agenda
To sum up, here’s the winning agenda for a 21st century supply side renaissance:
1. Cut the top tax rate on business income to no higher than 25 percent. Leave wage taxes alone, and let the Left have their 39.6 percent “scalp the rich” talking point.
2. Allow all business investment to be deducted in the year of purchase
3. End the double taxation of savings
4. End the double taxation of international income
5. Cut taxes for the middle class, either by embracing an increase in the child tax credit, or cutting the payroll tax, or by some other means.
While not totally a supply-side message, when Larry Kudlow writes, it’s worth reading. As always, love seeing Kudlow’s name in the Investor’s Business Daily.
Be sure to grab a copy of this week’s The Weekly Standard for an article about an original supply-sider, Jeff Bell, who is running for the US Senate in New Jersey.