Trump proved tax cuts increase revenue — again
Joe Biden is taking a wrecking ball to Donald Trump's presidency. With just a week in office, Biden all but demolished Trump's America First legacy. With a few shaky strokes of a pen, he's thrown open the borders, wrecked the energy sector, signaled our capitulation to communist China, reinstated cultural Marxist indoctrination in schools, and returned radical gender experimentation to our military.
Biden was so busy enacting Bernie Sanders's policies that at one point, he was heard muttering, "I don't know what I'm signing."
Never before have we seen one president's accomplishments so quickly and thoroughly undone. All this was possible because Trump relied so heavily on executive orders. Although Trump carried GOP majorities into both chambers of Congress, Speaker Paul Ryan and other RINOs stubbornly obstructed Trump's agenda and squandered the GOP's House majority.
Trump's sole significant legislative achievement was the Tax Cuts and Jobs Act, which delivered broad-based tax relief, created millions of new jobs, and actually increased revenue to the Treasury. Because every Democrat in Congress voted against Trump's tax cuts, the media got right to work obscuring and discrediting those results. Their favorite and most deceptive trick was pointing to lower tax refunds for wage-earners while ignoring greatly reduced withholdings.
But the TCJA proved, once again, that lower taxes result in increased tax revenues, as well as economic growth, low unemployment, and rising wages. In the year following the TCJA, tax revenues were up $190 billion, unemployment was at a historic low of 3.5 percent, and real wages saw their largest increase in two generations — with the lowest earners receiving the largest gains.
Before the China virus wrecked the economy, the TCJA massively increased America's prosperity and decreased dependency on the government. For these reasons, Democrats hated it like poison, and Biden ran on a promise to abolish tax cuts.
It wasn't always the case. In 1960, John Kennedy cut Franklin Roosevelt's 90-percent top tax rates down to 70 percent, noting, "[A]n economy hampered by restrictive tax rates will never produce enough revenues to balance our budget, just as it will never produce enough jobs or enough profits[.] ... In short, it is a paradoxical truth that tax rates are too high today and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the rates now."
Sure enough, annual tax revenues climbed from $94 to $153 billion in the seven years after Kennedy's tax cut.
But by 1980, inflation and bracket creep had pushed many millions of formerly middle-class taxpayers into Kennedy's highest tax brackets, with the predictable results of lower incentives to work harder and invest more — and, consequently, reduced tax revenues.
Ronald Reagan, who was a Democrat when Kennedy cut taxes, also recognized the obvious: that you can have high tax rates on low economic output or low tax rates on high economic output. Reagan passed sweeping tax cuts, and as sure as the sun follows the moon, it resulted in almost doubling tax revenues in the 1980s.
But the Democrats' most effective election pitch is class envy, so they pointed to all the new wealth Reagan's tax cuts created with howls to "soak the rich" and "make them pay their fair share." At the same time, Washington engaged in a bipartisan orgy of increased deficit spending, which the Democrats and their media flacks dishonestly blamed on tax cuts.
Biden will have a more difficult time undoing Trump's tax cut legislation than his executive orders, but Democrats running for Congress in 2022 will be again promising to do just that. They'll also be offering up a $15 minimum wage for a dwindling number of jobs, a universal basic income for those who prefer sloth, government-funded health care, college loan forgiveness, and reparations for slavery. For any dissenters, they promise FBI surveillance and DoJ prosecutions.
If they succeed, there will be little motivation for many to get off the couch, and the American dream will be replaced by Venezuela's Marxist nightmare. That's why it's so crucial for Republicans to defend the latest example of lower taxes unleashing American prosperity, opportunity, and self-sufficiency.
Jim Daws hosts Right Now, a webcast on news, politics, and culture from an American nationalist perspective, at www.jimdaws.com.