American Elephants


Cutting the Corporate Tax Will Create Growth. That’s A Good Thing! by The Elephant's Child

To quote John Steele Gordon this morning “Only the brain dead could see Trump’s tax plan as a negative for the economy.Newsweek: “Trump’s Proposed Tax Plan Could Cost the Government $6 Trillion.” Why am I not surprised? Democrats simply do not understand economics. Allowing the people to keep more of their own money is simply incomprehensible to your standard run-of-the-mill Lefty.

Under the new rules, an individual making $35,000 each year would be able to remove $15,000 from their taxable income through the deduction, leaving just $20,000 for the government to tax.

On top of these tax cuts, Trump is expected to outline his proposal to lower the corporate tax rate from 35 percent to 15 percent. And he will seek to reclassify small, individually-owned businesses that currently file their taxes under the individual code so they are under the corporate tax code instead.

Democrats can only think of the 20% of corporate income that would not be taxed and how can the government possibly get along without that corporate money? Leftist hatred for rich corporations is always a mystifying thing. Everything they wear, eat, use and work with is a product of a large corporation, if they are not government bureaucrats they probably work for a large corporation and they indignantly badmouth corporations and seethe at the exorbitant salaries of American CEOs.

For a business, taxes are just a cost of doing business. Those costs are figured into the price of whatever the business produces, and are paid by the taxpayers who buy the products. If taxes go up, so does the cost of the product. If taxes go down, the business has some extra to expand, to innovate, to create, and the economy grows.

It is very simple, but Democrats do not think in those terms. They want a bigger pile of tax money so they can buy more votes to win elections so they can be in charge. Being in charge means giving nice things to the people, to get their votes, and spreading the wealth around, again so they can be in charge. Being in charge is the goal because they can get rid of all the annoying interference in their goal of a more perfect socialist world where everyone lives in peace and harmony in a world saved from the horrors of global warming and capitalism and guns. Or something like that.

They thought they had glimmers of a real move towards the glorious future with Hillary, and this obnoxious blowhard buffoon smashed it all up and they can’t wait to destroy him or impeach him or put him in prison. They still remain sure that if they can just turn over the right rock, they will find the Russian involvement — in something or other. Good Lord, they are predictable.

From The American Thinker by Thomas Lifson: “Trump tax plan goes for growth”

After President Obama’s two terms of anemic economic growth and huge federal deficits, there is a lot of room for growth in the American economy.  Targeting “seed corn taxes” that obstruct investment is the smart way to spike growth rates, which will bring jobs, increase taxes (in the long run), and swing political approval toward the GOP president and Congress.  It worked for Reagan, and it will work for Trump, if a version of the tax plan becomes law.

The White House briefing and one-page description of President Trump’s plan for tax reform issued yesterday contain the bones of an ambitious plan that could indeed jump-start the economy by lowering corporate income and capital gains tax rates, and by repatriating corporate money held overseas to avoid the punitive 35% levy on overseas profits when they are brought home to the USA.

From Economics21: “No, New York Times: Bush’s Tax Cuts Did Not Disappoint”

Basic economics tells us that if you tax something, you’ll get less of it. True, not all tax cuts are created equal. Successful tax reductions are immediate, permanent, broad-based, and (unlike tax rebates) rely on tax rate reductions to encourage working, saving, and investing. Such well-designed tax policies have a clear record of success.

Nobel Laureate Edward Prescott has shown that much of America’s widening economic advantage over other major economies between the 1970s and 1990s can be traced to America’s decision to lower tax rates while other countries raised them.

Harvard economist Martin Feldstein estimates that a dollar increase in taxes costs the economy 76 cents of growth.

Aside from the constant, furious Democrat insistence of being outraged at anything done by President Trump, they are predictable, predictable predictable. And possibly scared to death that he’ll get his tax plan passed.

Thanks to Obama, America’s corporate tax rate is the highest in the world. Growth has been anemic for 8 long years. A significant cut in the corporate tax rate could raise growth to 3% which is getting closer to the long-term norm —which would create jobs and put those folks who have essentially given up at the idea of working back in business. Hope and growth will do a lot for the country, and the American people.

ADDENDUM: Another contrast in media headlines — Wall Street JournalTrump Unveils Broad Tax-Cut Plan.” The New York Times Tax Overhaul Would Aid Wealthiest.” Like I said Predictable!

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