The Myth that Extending the Trump Tax Cuts Will Blow Up the Debt

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Unleash Prosperity Hotline
Issue #1105
9/18/2024
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1) The Myth that Extending the Trump Tax Cuts Will Blow Up the Debt
Stop us if you've heard us say this before: In the six years since the Trump tax cuts were enacted, tax revenues have come in HIGHER than was expected without the TCJA. That is because of the positive economic effects of the lower tax rates. The Trump tax cuts worked—hard stop.

So where is this fabled multi-trillion-dollar tax loss?

We also hear that the Left’s plan to cancel the Trump tax cuts will lower the deficit.

The Washington Post claims this "would generate around $5 trillion in additional tax revenue from the wealthy and corporations over the next decade."

Really? A $5 trillion tax hike will have NO negative effect on the American economy?

Raising our business tax rates to the highest in the world, doubling the tax on capital gains, and a first-ever tax on the appreciation in the value of stocks and property won't hurt jobs and growth?

This is "static analysis" on steroids. Under this simple-minded thinking, if we just raise taxes to 99%, we can retire the national debt and afford Medicare for all, reparations, the green new deal, and free college.

There is another problem with this theory - if higher rates do squeeze out more revenue, Congress will spend every penny and then some. As Milton Friedman famously noted: "government will spend whatever the tax system raises, plus as much more as they can get away with."

To avert a fiscal crisis we need spending restraint and strong economic growth – and tax hikes are counterproductive to both of those.

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2) Would Republicans Agree to Raise Taxes to Fund the Military Industrial Complex?
We are told that Senator Mitch McConnell invited the Rand Corporation's Commission on the National Defense Strategy to brief the Senate Republican conference lunch yesterday.

That group's most recent report openly calls for massive spending and tax hikes:

Given the severity of the threats, the FY 2027 and later budgets for all elements of national power will require spending that puts defense and other components of national security on a glide path to support efforts commensurate with the U.S. national effort seen during the Cold War...

The Cold War demanded a national mobilization for military service, an economy geared more toward production for national security, and a unity of effort across government (including Congress) behind shared security missions that are missing today. Defense spending in the Cold War relied on top marginal income tax rates above 70 percent and corporate tax rates averaging 50 percent.

This is Reaganism in reverse. It was Reagan's CUTTING those 70 and 50% tax rates that fueled the 1980s economic boom that played the vital role in winning the Cold War – without firing a shot. How would disabling the U.S. economy with higher tax rates increase American national security?

This report is particularly boneheaded in not understanding that unlike in the 1960s and 1970s, the most important global power is economic - not military.

We hope this Rand pitch received a dismissive reception from Senate Republicans.

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3) What Is Happening to the 20-Somethings?

Here are some disturbing trends.

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This is what boomers get for letting their college graduates live in their basements.

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4) Do Progressives WANT Illegal Immigrants to Vote?

A recent Pew poll finds roughly 80% of Americans support voter ID laws. They're a political no-brainer.

But Democrats shriek when they hear the words.

The latest example of their crusade to stamp out voter id is happening in – no surprise – California. In Huntington Beach, a city of 194,000, residents recently approved a requirement for voter ID in elections – a form of which is mandatory in 36 states and almost every industrialized democracy.

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But, the state legislature moved with lightning speed to block the Huntington Beach measure in fear that it would spread to other cities.

A bill has just landed on Governor Gavin Newsom's desk that would ban all local governments from enacting voter ID laws. He is almost certain to sign it. "An overwhelming body of evidence proves that voter ID laws only subvert voter turnout and create barriers to law abiding voters," claimed the bill's author, State Senator David Min. He's right. Voter ID inhibits turnout of noncitizen "voters."

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5) Chart of the Day: All Races Fare Better Under Trump than Biden

Another nugget of data from the latest Census report highlights the superiority of Trumponomics over Bidenomics.

The Census data confirm, as shown in this chart from the Wall Street Journal, that blacks, whites, Hispanics, and Asians ALL had bigger income gains when Trump was in the White House than during the Biden years. Asians and Hispanics saw the biggest relative gains of all.

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6) And Thus Began the Regulatory State

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