What's in Your Wallet?
The choice for voters is clear: a tax cut from Donald Trump or a pay cut courtesy of Hillary Clinton. Trump is promising to slash income taxes to zero for millions of people currently paying them, and to reduce the tax bite on everyone.
Clinton isn’t cutting income tax rates for anyone. Instead, she’s campaigning to hike business taxes, despite warnings it will cause wages to plummet and the economy to tank.
No wonder Trump is moving up in the polls. Most Americans are still making less than they did in 2007. The mainstream media want to double down on the “birther” controversy and other fabricated issues. Voters aren’t fooled. They’ll vote their wallets.
Trump proposes a zero income tax rate for singles making $25,000 and couples making twice that. Instead of paying the government money, they’ll file a one-page tax form that says, “I win.”
Moving up the ladder, singles earning $35,000 will save about a thousand dollars, according to tax experts at CNN Money. And singles earning $64,000 will get a $2,700 break, on average. Anyone earning $112,000 will save more than $5,300. Sweet.
And that’s before applying Trump’s proposed deductions for child care, which will average $12,000 per child regardless of whether parents actually incur child care expenses. A boon for stay-at-home parents. Bottom line: Working couples with two kids will pay no federal income tax on their first $60,000 to $70,000 in household income.
Clinton promises credits — but only to families that actually spend.
Disregard Clinton’s bogus claims that Trump wants “to give trillions in tax breaks to people like himself.” Nonsense. Trump caps deductions at $100,000 for singles and double that for couples, so some high rollers will end up paying more.
As for the misery of tax preparation, Trump simplifies it: only three brackets, all lower. He jokes about putting H&R Block out of business. Clinton’s plan adds complexity: more brackets and additional rules.
Keeping more of what you earn is good. Earning more is even better. To give everyone a shot at a brighter economic future, the next president and Congress need to jumpstart the economy by slashing business taxes. Right now, the economy is limping along at 1.2 percent — a third of the normal growth rate over the last century. Partly to blame for the stagnation are corporate taxes — the highest in the developed world. They are driving companies to leave the U.S. and putting those that stay at a global disadvantage.
Trump proposes cutting taxes by over half for large and small businesses to encourage them to stay, expand and hire.
Meanwhile, Clinton preaches class warfare, vilifying businesses for not “paying their fair share” and pledging tax hikes. Recession, here we come. A Federal Reserve report warns that “increases in corporate tax rates lead to significant reductions in employment and income.”
Typically, Democrats bash business tax cuts as “trickle down economics” to benefit rich Republicans. But the inspiration for Donald Trump’s tax reform came from a Democrat — John F. Kennedy — who faced a stagnant economy when he became president in 1961.
Kennedy understood tax cuts would cause businesses to invest, boosting worker productivity. More productive workers lead to higher wages as well as more goods and services to go around. A more abundant nation.
Kennedy startled the nation by insisting that tax cuts would ultimately produce more tax revenue — not less — thereby reducing deficits. He was right, as Larry Kudlow explains in his new book, “JFK and the Reagan Revolution.”
JFK slashed business taxes, and after his assassination, Congress enacted the rest of his tax program, igniting 5 percent annual growth for the next eight years.
Ronald Reagan repeated the formula in the 1980s, launching 20 years of 4 percent plus growth.
It can happen again. Hillary Clinton has given up on growth. Voters can’t afford to.
Betsy McCaughey is a former lieutenant governor of New York state and a senior fellow at the London Center for Policy Research and author of “Government by Choice: Inventing the United States Constitution.” To find out more about Betsy McCaughey and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.
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