The Wages of Stupidity

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Unleash Prosperity Hotline – Weekend Edition
Issue #1174
01/03/2025 – 01/05/2025
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1) The Wages of Stupidity

Fourteen blue states (including DC) raised their minimum wage on January 1st.

We agree in principle with the 1987 New York Times ([link removed]) that the ideal minimum wage is $0. We don't have a big problem with modest minimum wage laws, but 10 states and dozens of cities now have a minimum wage above $15 an hour. In some California cities ([link removed]) the minimum wage is above $19 an hour and Seattle is well over $20 ([link removed]) .

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We note that with the exception of Washington which had a slight gain last year, every one of the states with a $15 or more minimum wage is losing population. We also note that most of the states with a super-minimum wage rank near the bottom of job creation.

The effect of the minimum wage is to raise the take-home pay for some workers and reduce it to zero for many of the least skilled who don't get hired. The vast majority of workers who earn minimum wage are in starter jobs and get a pay raise after one year on the job.

We've long advocated ([link removed]) a teen minimum wage of $6 or $7 an hour to help get young people into the labor force. We need young people working - not doing drugs and/or playing computer games.
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2) Free Market Economic Leaders Voice Support for Speaker Mike Johnson

Unleash Prosperity Now (the 501 c4 arm of Unleash Prosperity) co-founders Arthur Laffer, Steve Moore, and Steve Forbes joined many other distinguished supply-side economists to send a letter to Members of Congress yesterday. The purpose was to voice their admiration of Speaker of the House of Representatives Mike Johnson (R-LA) in advance of votes for Congressional leadership offices that will take place this week. The letter says:

We the undersigned write to inform members of Congress that we are strong admirers of House Speaker Mike Johnson. Many of us have worked firsthand with the Speaker on critical issues to expand our economy and raise incomes for all Americans.

Speaker Johnson is an unflinching champion of pro-growth tax reforms, limited government, deregulation, school choice, sound money, and budget control... We look forward to working with President Trump and Speaker Johnson to make the American economy great again and return fiscal sanity to Washington.

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The last thing America needs right now is a bruising fight over the speakership. Remember, Congress cannot convene until a Speaker of the House is voted in. If that doesn't happen by Monday, then the presidential election can't be certified - thus playing into the hands of liberal "Resisters" who want to keep Trump out of the White House.

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3) ...While States Keep Slashing Tax Rates

New Hampshire has always been a no-personal income tax state. Now they've gone all the way and ended their capital gains tax, as of 1/1/25. This makes eight states with truly no income tax again. (The number had dropped to seven when Washington State adopted a capital gains tax a couple of years ago.) Congrats to New Hampshire Governor Chris Sununu for getting this done.

For more good news, we're thrilled to report that with the New Year, Iowa and Louisiana have joined the list of states with a flat rate income tax ([link removed]) . There are now 16 such states and with another eight states having no income tax, half the states have either a flat tax or no income tax at all.

A special nod to Governor Kim Reynolds, who has slashed Iowa's progressive income tax system with a top rate of 8.98% down to a 3.8% flat income tax today. Iowa has also abolished its inheritance tax.

Similarly, Louisiana has moved from a progressive system that had a top rate of 4.25% to a 3% flat tax. In North Carolina, meanwhile, the state's flat income tax dropped from 4.5% to 4.25% on January 1, 2025. A year later, at the start of 2026, the rate will fall again to 3.99%.

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4) Congratulations Alexandra Preate

We're very angry at Donald Trump because he keeps stealing away our top Unleash Prosperity talent.

In his first term, he took our co-founder Larry Kudlow from us to serve as his top White House economic advisor. Now he's taking away our marketing and events director Alexandra Preate. We don't even get any future draft picks. Alexandra will be a special counselor to incoming Treasury Secretary Scott Bessent, who is an Unleash Prosperity advisory board member.

We will wait patiently until Alexandra comes crawling back to us!

Seriously, Alexandra is the perfect partner for Bessent and her appointment is a testament to the great work she has done for us since UP's inception.

Here is the full text of President Trump's announcement on social media:

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5) Did You Know 2025 Is A Magical Year

Our friend Scott Grannis (the "Calafia Beach Pundit ([link removed]) ") reminds us that 2025 is a very special year and those who are good with numbers will appreciate his point:

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6) Some After-Christmas Shopping?

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