President Trump has unveiled a tax plan to ignite economic growth and simplify the tax filing ordeal. Sadly, top Democrats are responding with divisive rhetoric and lies. Senator Chuck Schumer dismisses the plan as “wealth-fare.” House Minority Leader Nancy Pelosi calls the plan “giveaways to big corporations and billionaires.”
Intent on stoking envy, these class warfare politicians are willing to forfeit economic growth. But the nation can’t afford to.
Here are the facts to rebut their demagoguery:
You’ll hear the same complaint in the “Not One Penny” TV ads paid for by MoveOn.org and other left-wing groups. They warn Congress not to allow one cent of tax cuts for high-income people. But the top 10% of earners pay 80% of federal income taxes. Do the math. Any sizable tax cut will have to benefit them. Earners in the bottom half of the nation pay only a sliver — under 3% — of federal income taxes collected.
Senator Elizabeth Warren rages that the plan “delivers massive cuts to corporations” and “kicks working families to the curb.” Wrong, Senator. Business tax cuts don’t just benefit businesses. They produce higher wages and more job opportunities for workers.
America taxes corporations at the highest rate of any industrialized country. That drives companies overseas, sabotaging our workforce. The Trump plan lowers the rate from 35% to 20% to make the U.S. competitive. The plan also allows companies to immediately deduct 100% of plant and equipment costs — a change that will encourage companies to buy more computers and trucks and hire more office workers and drivers.
When countries lower corporate taxes, wages go up, according to data from 72 countries. American workers have toiled for years without an improvement in take-home pay or standard of living.
Democrats label Trump’s cuts as “trickle-down economics,” claiming they don’t produce growth. These Dems have forgotten history.
In 1962, President John F. Kennedy slashed investment taxes. After his assassination, his broader tax cuts were enacted, producing eight years of soaring growth — 5% a year.
In the 1980s, President Reagan slashed rates again, giving the nation nearly a decade of robust 3.8% growth.
In 2003, George W. Bush’s tax cut boosted the economy, producing 4% growth for six straight quarters.
Compare this vigorous growth with President Obama’s eight years of stagnation. Obama’s economy lumbered along at around 2% because high taxes and over-regulation discouraged companies from investing. Democrats still insist that 2% growth is the new normal. Nonsense. Roll back regulations and taxes, and the economy will surge.
For individual filers, Trump’s plan simplifies the maddeningly complex process, lowers rates, and doubles the standard deduction — a big savings. To goose the economy and get money into people’s pockets faster, Congress should make these changes retroactive to January 2017. Just because Congress dragged its feet on tax reform doesn’t mean the public should have to wait.
Pelosi warns Trump’s plan will “blow a huge whole in the deficit.” That’s a new religion for Democrats. Don’t be fooled. The real problem isn’t that taxes are too low. It’s that spending is too high, and Dems want to push it higher.
Trump’s plan eliminates the deductibility of state and local taxes. That deduction has lulled residents of tax hell — Connecticut, New York, New Jersey, and California — into complacency. Without it, residents will feel the full pain caused by the tax-and-spend politicians running their states. Representatives from these states are up in arms, demanding that Congress keep the deduction, and they may prevail. But the real issue isn’t whether state taxes are deductible — they’re just too high.
Expect more demagoguery as Democrats try to block Trump’s tax relief. They claim to want a bipartisan plan. Their inflammatory rhetoric proves otherwise. Unwilling to help govern, they call themselves the “Resistance.” Don’t count on them to help rebuild America’s economy or grow your paycheck.
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