1) Another Reason To Be Optimistic About 2026: The Tax Cut Still Hasn't Hit Americans' Wallets

There's a lot of chatter about a potential recession next year because of the so-called "affordability crisis," facing families.

We're not buying this pessimism. One of many reasons to be bullish is that most families haven't felt the savings yet from the tax cut that passed in July.

An estimated $190 billion of income tax relief (or about 0.5% of GDP) from the Trump Big Beautiful tax cut arrives in 2026, with most in the first half of the year:

The analysts at Piper Sandler notes that "it seems unlikely many people will adjust their withholding to claim benefits this year. Instead, they will be surprised by large refunds during the filing season next year."

This means starting in January, the amount of withholding tax snatched away from worker paychecks will be lower next year, plus taxpayers can expect about $90 billion in refunds from the 2025 retroactive tax cuts.

We are not Keynesians and we don't believe that giving people money to spend stimulates the economy, but letting people keep more of what they earn DOES encourage work, increase output, and juice consumer spending.

The average filer will save $1,000 on their taxes next year because of lower withholding taxes. Thank you, Donald Trump.

2) Chart of the Day

The same people parading around the streets shouting about saving democracy also want a bigger and more intrusive government. But the chart below shows that if you want to save democracy, you need to shrink the government and expand economic freedom.

3) Some Good News From Jolly Old England

Britain’s economy has been in the toilet now for almost a decade. The stagnation is reminiscent of what happened in the UK after WW2 when the Brits went socialist, until Margaret Thatcher saved the country with her election in 1979.

Our UP co-founder, Dr. Arthur Laffer, is now in London advising the Conservative and Reform party leadership about tax cuts and the Laffer Curve.

He notes that “Britain is already facing the highest taxes since just after World War Two, but the Labour Party wants a new wealth tax.”

Even former PM Sir Tony Blair agrees with Laffer and says that rather than raising taxes, the top rate of income tax should be cut from 45% to below 40%.  

Good news: the public seems to agree with Blair and Laffer. The latest polling shows that the Reform Party and the conservative party are now at above 50% - weaning pro-growth changes may be coming to England at last.

4) Don’t Take the Money and Run

This headline reminds us of what Ed Crane, the founder of the Cato Institute, used to say when opponents of term limits complained it would lead to a "Congress of mediocrity." His retort: "'mediocrity would be a vast improvement."

And by the way, if the high and mighty universities want to be "academically independent" and don't want to comply with Trump's new rules (some of which we don't agree with): don't take the hundreds of billions of dollars the taxpayers are doling out each year.

5) Another Democratic Mayor Who Understands Socialism Won't Save Our Cities

We recently noted that Dan Lurie, San Francisco's new pro-business mayor, has presided over falling crime, cuts in bloated city departments and a resurgence in office occupancy.

Now, we have Houston Mayor John Whitmire, who is all about improving daily life for the residents of America's 4th largest city, with 2.3 million people.

The lifelong Democrat has conducted a public spending audit, reduced the city's workforce and curtailed public transit boondoggles.

"Most major cities are in turmoil," Whitmire says. "We're not." He faults fellow Democratic mayors Karen Bass of Los Angeles and Brandon Johnson for prioritizing "performance protesting" over the delivery of city services. As for New York's Mamdani, he bluntly says "He and me are in different universes."

With a 59% approval rating, Whitmire's one of the most popular big-city mayors. Los Angeles' Karen Bass is at 32%, and Chicago's Brandon Johnson is at 26%.

Americans simply want, as the old Chicago Mayor Richard M. Daley used to say, “a city that works.” Is that so hard?

6) The Very First No Kings Protest

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