k***y
发帖数: 104 | 1 Kudlow: Donald Trump Is the middle-class growth candidate
Larry Kudlow | @Larry_Kudlow
1 Hour Ago
CNBC.com
Did Hillary Clinton actually propose raising middle-income taxes in a recent
speech? The audio suggests she said "we are going to raise taxes on the
middle class," although the prepared remarks indicate she meant "we aren't."
Well, these things happen. But the fact remains that Hillary Clinton's
proposals to raise taxes on the so-called rich, corporations, Wall Street,
investors (making money from capital gains, dividends, and financial
transactions), and estates will greatly harm middle-income wage earners who
have essentially not had a pay raise since the year 2000.
Donald Trump is set to give a major economic speech in Detroit on Monday. In
general terms, he will pledge to lower marginal tax rates on both large and
small businesses and on all income classes. He also will propose a hike in
the standard deduction for families and special deductions for childcare and
the elderly.
All of these polices will help the middle class. Trump's plan will generate
substantial new investment, business formation, jobs, and growth – and,
hence, higher wages.
Shoppers walk along Lexington Avenue in the eastern Midtown section of
Manhattan in New York City.
Getty Images
Shoppers walk along Lexington Avenue in the eastern Midtown section of
Manhattan in New York City.
Trump is the pro-growth candidate in this race. Hillary Clinton is the anti-
growth candidate. Trump wants to expand national income and the economic pie
. Clinton wants to redistribute income and shrink the pie.
In past columns, I have equated Trump's tax-reduction plan to the JFK and
Ronald Reagan tax cuts, which generated economic booms of roughly 5 percent
growth per year. President Barack Obama, by comparison, has raised taxes,
spending, and regulations, producing the worst recovery since World War II.
And Clinton intends to follow in Obama's footsteps with a Bernie Sanders-
like, left-wing policy mix. She is the Democrats' anti-JFK. What a pity.
I want to draw on some academic work to validate how Trump is the pro-growth
, pro-middle-class candidate.
Let me begin with American Enterprise Institutes economists Aparna Mathur
and Kevin Hassett. They have written extensively on the adverse effects of
high corporate taxes on worker wages. They argue that high taxes drive
capital out of the high-tax country, like the U.S., which leads to lower
domestic investment. That in turn reduces the productivity of the worker,
who will lack the latest advances in technology and machinery. And since
there is a tight link between worker productivity and pay, lower wages
result.
Mathur and Hassett cite University of Chicago economist Arnold Harberger to
explain that when taxes are raised on corporations, wages are lowered not
only for the workers in those firms, but for all workers in the economy. So,
a $1 corporate income tax leads to a $1 loss in wages for a firm's workers.
But that tax could lead to more than a $1 loss overall when we look at all
wages for all workers.
President Obama and Clinton wrongly believe that the corporate income tax is
a tax on the rich. The reality is that rich corporations don't pay taxes --
workers do.
Another erroneous claim from Obama and Clinton is that the rich don't pay
their fair share. But a new Congressional Budget Office (CBO) study shows
that the so-called rich pay the lion's share of federal taxes. The CBO
reveals that the top 1 percent of households pays an average of 34 percent
of income in federal taxes, while the middle 20 percent of households pays
only 12.8 percent. This is confirmed by a recent Tax Foundation report.
And taxes for the top 1 percent have been going up. Between 2008 and 2012,
the top 1 percent paid an average tax rate of 28.8 percent. But in 2013 that
rate spiked to 34 percent as a result of tax increases and the Affordable
Care Act. This data is summarized by Mark J. Perry of the University of
Michigan and AEI.
It's also worth noting that the so-called rich haven't had it so great
lately. Recent studies by Manhattan Institute economist Scott Winship and
Cato Institute economist Alan Reynolds show that during the Great Recession,
the top 1 percent lost 36 percent of its income, while income for the
bottom 90 percent was 12 percent lower. As of 2014, the top 1 percent was
still poorer by 18 percent than it was in 2007, compared with a 9 percent
decline for the bottom 90 percent. Reynolds also notes that middle-incomes
fell only 1 percent in the 2007-09 recession, after counting tax cuts and
government benefits.
These facts and figures slay a lot of left-wing urban legends. Highly
divisive urban legends, I might add.
What matters most for all Americans is economic growth. As the man behind
supply-side economics, Arthur Laffer, frequently reminds us: Tax something
more, get less of it. Tax something less, get more of it.
Trump's big-bang economic speech on Monday will outline policies to tax
growth less and restore American prosperity. Mrs. Clinton, on the other hand
, has nothing but prosperity killers up her sleeve.
Commentary by Larry Kudlow, a senior contributor at CNBC and economics
editor of the National Review. Follow him on Twitter @Larry_Kudlow. |
|
