The two of us worked to help design and then pass through Congress Donald Trump’s 2017 tax-cut bill in 2017.
We’re proud of that because the overwhelming economic consensus based on real-world evidence is that the Tax Cuts and Jobs Act worked — even better than we’d predicted.
But after four years of the Biden-Harris administration’s inflationary policies, American workers have less savings, more credit-card debt and smaller paychecks.
And with the election fast approaching, things could get worse for the working class: Vice President Kamala Harris could win and keep her promise to repeal the Trump tax cuts.
Democrats disparage the Trump tax cuts as a “tax cut for the rich,” but the evidence is clear: All incomes benefited from a rise in take-home pay and the ramp-up in the American economy.
Real wages for workers in the middle of the income scale increased 4.9% — the fastest two-year growth in 20 years — and real median household income rose by $5,000 from 2016 to 2020.
The poverty rate and unemployment rate reached their lowest levels in 50 years, with all-time lows among African-American and Hispanic workers and those without a high-school degree.
Americans earning under $100,000 a year received an average tax cut of 16%, while the share of taxes paid by the top 1% increased.
How is that a “giveaway” to the rich?
It’s no coincidence the best year for manufacturing-job creation in 21 years was the year immediately following enactment of the Trump tax cuts. Manufacturers added 263,000 new jobs, and manufacturing wages increased by 3%, growing an additional 2.8% in 2019.
Contrast that record with Biden-Harris’. Since Trump left office, real weekly earnings for middle-class workers are down by about 3.6% or an estimated $2,000 in annual purchasing power.
That’s because prices are at least 20% higher for most grocery items, gas, utilities and housing costs. But paychecks have lagged behind.
This runaway inflation didn’t happen by accident, and it certainly wasn’t due to Trump policies. Inflation was just 1.4% in the month President Biden and Harris took office and launched a $10 trillion spending spree with borrowed and printed money.
Worst of all, the ironically named Inflation Reduction Act poured billions of dollars into taxpayer-funded green-energy subsidies for the wealthy to buy luxury electric vehicles made up of parts manufactured in China.
Harris wants to go even further and do more damage. Under her plan, a family of four earning $75,000 will owe an additional $1,500 in taxes. A family of five with two earners making around $100,000 will owe an extra nearly $7,500 in taxes. This would be the single-biggest tax increase ever levied on the middle class.
Not only did these families get a tax cut because of the 2017 Trump tax relief, but tax filing got easier too. More than 90% of taxpayers opted to take the law’s doubled standard deduction, reducing the need to do complicated itemized tax returns.
Harris’ plan would be an instant tax hike while increasing the burdens and complications of filing.
Harris says small businesses are the backbone of the economy and promises to help them. Really? Under her plan the small-business tax rate would rise to more than 44%.
The Trump tax cut provided a 20% small-business deduction that allows them to compete with larger corporations, which Harris would vanquish. Small businesses would pay a higher tax rate than some of the biggest corporations in the world.
There’s an old saying that Democrats love jobs but hate employers.
They think they can tax American families and businesses to prosperity.
We’d love to know when and where that has ever worked.
Jason Smith, a Republican from Missouri, is chairman of the House Ways and Means Committee. Stephen Moore is a visiting fellow at the Heritage Foundation whose latest book is “The Trump Economic Miracle.”
Read the full article here
