Republican priority: Make Trump's tax cuts permanent

House Republicans are crafting a modernized version of Newt Gingrich’s famous 1994 deal with America. It’s a great idea for Republicans t...

House Republicans are crafting a modernized version of Newt Gingrich’s famous 1994 deal with America. It’s a great idea for Republicans to draw a stark contrast to the Biden agenda of trillions in new spending, higher corporate tax rates, reregulating America and the war on terrorism. household energy. Voters want to know what Republicans are for.

At the top of this list of GOP legislative promises, along with school choice and a pro-growth energy strategy, should be to make the 2017 tax cuts permanent. The Tax Cuts and Jobs Act was designed to spur investment, hiring and innovation, and it worked. Corporate tax rates have fallen from the highest in the world at 35% to 21%. Small business tax rates have been reduced from about 40% to 32%. The average earner on a middle income paid between $1,500 and $3,000 less in taxes.

It was not about tax cuts for the rich. Real wages for the bottom 10% of Americans rose 8%, compared to a 5% increase for the top 10%. The wealth of Americans in the bottom 50% grew three times faster than the wealth of the top 1%.

Due to budget rules, some of the 2017 tax cuts will begin to expire in 2023. If Congress does nothing, most Americans will pay more. The more generous child credit and increased personal exemption, policies backed by President Biden and the Democrats, will disappear in 2025. Even more worrying for the economy, total capital investment spending for businesses will begin to disappear l ‘next year.

All House and Senate Democrats voted against the 2017 package. They insisted cutting taxes would not help overcome the tepid economic growth of the Obama years. We now have proof that they were wrong.

Two years after the tax law was passed, four remarkable things happened. First, the economic growth rate returned to 3% and was on track to approach 4% in 2020 without Covid. Second, real median household income has increased by $6,000 in two years, more than it increased for eight years under Barack Obama. It is also the largest two-year inflation-adjusted income increase in history. Third, black and Hispanic unemployment and poverty rates have fallen to their lowest levels in at least 25 years.

Last but not least, the share of taxes paid by the richest 1% of Americans actually pink. Income tax payments from the wealthy fell from 37% to 39% of total tax revenue, while all other income groups paid a smaller share. There was an undeniable “Laffer curve” effect: lower rates generated more growth and more tax revenue for the wealthy.

The Trump administration has pursued other pro-growth policies. It is difficult to determine to what extent the economic boom of 2017-2019 was the direct result of tax rate cuts. But when policies work, you don’t reverse them.

Treasury Secretary Janet Yellen said recently that she sees no evidence that tax rate cuts — or, as she called it, “modern supply-side economics” — are working to increase poverty. growth. She should take a closer look at the Trump and Reagan years, when lower tax rates generated two of America’s great economic booms.

Meanwhile, supply-side tax cuts are back in vogue at the state level. Many governors have called for deep tax cuts this year, including a plan in Mississippi to eliminate state income taxes altogether. Even Colorado Governor Jared Polis, a Democrat with national ambitions, said his state should consider phasing out its income tax.

Voters apparently understand what Mr. Biden and Ms. Yellen do not. A recent Scott Rasmussen

survey finds that 57% of voters favor making Trump’s tax cuts permanent. Republicans running hard to retake the House and Senate in November take note: Trump’s tax cuts are good politics and even better economics.

Mr. Kudlow is the host of “Kudlow” on Fox Business Network. He served as Chairman of the National Economic Council, 2018-21. Mr. Moore is co-founder of the Committee to Unleash Prosperity. He was a member of President Trump’s Economic Recovery Task Force.

Journal Editorial Report: David Asman interviews former Trump economic adviser Larry Kudlow. Images: Getty Images Composition: Mark Kelly

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Newsrust - US Top News: Republican priority: Make Trump's tax cuts permanent
Republican priority: Make Trump's tax cuts permanent
Newsrust - US Top News
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