Larry Kudlow tears up Democrats’ reckless tax, spending and regulatory plan

So my overall take on the reconciliation news coming out of the House is pretty straightforward: go wake up, go bankrupt, and all this reckless plan of taxes, spending, and regulation will inflict great damage on the hand. – blue collar middle class labor, jobs, wages and prosperity – big damage.

I like it today when Secretary of State Blinken blamed Donald Trump’s conditional withdrawal plan in Afghanistan for the disaster executed by the Biden administration – love it!

Let me understand. They were absolutely bound and handcuffed to Trump’s plans, but, wait a minute, they religiously, obsessively, and derangedly reversed every Trump policy.

They canceled his tax cuts; its regulatory reduction; its energy independence; its Israeli support; his Iranian hostility; its border security and immigration policies; its policy towards the police, recidivism offenses; and I’m sure I’m forgetting other things.

So, we’re supposed to believe that Biden’s Trump inconvenience syndrome forced him to follow Trump’s Afghan withdrawal policies (which, by the way, were conditioned and blocked in a number of areas that never did. been respected and the former president himself said he would have taken fierce combat action against the terrorist Taliban if they acted as they did by breaking his deal during Biden’s evacuation)?

Getting back to all of the tax policy issues we’ll be discussing tonight, one of the funniest things about Ways and Means is that the total revenue is estimated at $ 2.9 trillion. Then the document says that, combined with the White House’s dynamic growth estimates of an additional $ 600 billion, this will fully offset the $ 3.5 trillion reconciliation spending program.

So let me get this right. A $ 2.9 trillion tax increase at all levels on every category of producer, investor, worker – every category – will increase growth? Truly? Naughty naughty. They’re off the Laffer curve.

All I’m asking on this one is a textbook reference that says raising taxes by record amounts will spur growth. I don’t care if it’s a supply side manual, a demand side manual, a Keynesian manual, a neoliberal manual, probably a Marxist manual (but I’ve never read one). Just show me a textbook that says big tax hikes will promote economic growth.

I’m just saying, guys. Find me intellectual support for this inept view.

Focusing more narrowly on these tax proposals, it looks like the hardest hit area will be small business, which in many ways is the heart of America.

I will quote the language of my pal Dan Clifton, who writes today: “A small business owner with an income of $ 500,000 will see his tax rate increase, the amount of income subject to that tax rate will increase.” 3.8%. surcharge and lose a 20% deduction. The business owner might consider an income tax rate of 46-48% before even considering payroll taxes and state and local taxes. ”

I do not know what it is for Democrats who want to let off steam and punish small entrepreneurs. Maybe Joe Biden or Ways and Means President Richard Neal once had their dog run over by a small business and never forgave them. I mean I don’t see a reason why, of all the economic constituents, they want to punish small businesses the most.

Now large companies are also affected. The corporate rate drops from 21% to 26.5%, add 4% to the state average and you look at over 30% – probably still at the top of developed countries in the OECD. The capital gains tax will drop from 20% to 25% plus, of course, the Obamacare surtax of 3.8%.

The highest personal income tax is 39.6%; plus a 3% surtax on income over $ 5 million, plus limited deductions for highly paid executives; plus a few hits on the estate and taxes on donations to grants or trusts; plus, of course, tax increases on international corporate income

The bloody totals represent roughly $ 1 trillion in personal tax increases, $ 900 billion on businesses, $ 700 billion on drug companies, and $ 120 billion on IRS enforcement. This is preliminary stuff. The Senate Finance Committee must weigh and the White House too.

Basically, almost everyone who works in a business will pay a combined tax rate of over 50%.

Of course, citing many studies such as CBO, Joint Tax, Tax Foundation, the biggest burden of corporate tax hikes will fall on middle income, blue collar workers.

Profits will drop. That means less money for pay raises, less money to hire, and less money to invest in new factories, equipment, and technology that would make the workforce highly productive. None of this will be possible with business tax increases.

I want to mention the American pharmaceutical companies working in partnership with the federal government – of course Operation Trump Warp Speed, developing a COVID vaccination in 6 months instead of 10 years, literally saving the country amid the worst pandemic in 100. years.

The Democratic reward for drug companies’ ingenuity and patriotism is to raise their taxes, crack down on price controls, and force them to pay additional Medicare rebates and comply with socialist European price controls. That’s what Democrats are saying thanks to our pharma and biotech innovators.

Outside of the tax committee, immigration policies surround wagons in areas of the House that would offer amnesty to dreamers, so-called essential jobs in the event of a pandemic with an eligibility start date that could allow a million illegals who have crossed this year to claim a path to citizenship.

It does not belong to reconciliation. We certainly need immigration reform, but this is a separate budget issue.

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I also read that any part of the economy, including the more than $ 500 billion in global warming, the Green New Deal, electric car and renewable fuel subsidies, any business, receiving one of these funds, must have a union shop by law.

I already noticed in this morning’s newspaper that Toyota and Honda, which are two huge American automakers, are protesting as they should.

So, I leave you with this question tonight: is it possible that some common sense can prevail in defeating this economic monstrosity? Is it possible?

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