04/11/2017

JFK-Style Strategic Tax Cuts Are Starting To Emerge As Way To Drain The Swamp

Lawrence Kudlow, New York Sun

“Drain the Swamp.” It was one of President Trump’s most powerful messages on the way to victory. Shake up Washington. Break a few eggs to create a new omelet. Overturn the establishment.

Well, hats off to Senate Majority Leader Mitch McConnell for doing some swamp draining when he exercised the “nuclear option” to overturn the filibuster for Supreme Court justices. Mr. McConnell busted an old 19th century rule, which was never in the Constitution, and cleared the path for the confirmation of Neil Gorsuch — as good a candidate as can be found. Good for Mr. McConnell.

Now let’s shift our swamp-draining focus to fiscal policy. In 1974, in the aftermath of Watergate, it was established that House and Senate budget committees would come together to pass a bill with something called “reconciliation instructions.” In this way, they would move a product through the committees that would only require 51 votes in the Senate to pass.

The process was allegedly designed to promote fiscal sanity, such as curbing the nation’s appetite for debt. Well, that didn’t work. Federal debt in public hands was about 23% of GDP back in the mid-1970s. Today it is about 77% of national income.

Not much discipline there.

The key problem with reconciliation is the highly flawed economic model used to score tax bills. Namely, the Congressional Budget Office and the Joint Committee on Taxation score tax relief as a revenue loser and tax increases as revenue gainers. Clearly, such modeling makes it difficult to reduce marginal tax rates.

In recent years, this static modelling has led to the notion that tax cuts need a “pay-for.” If you don’t cut the budget enough, you don’t get your tax cut.

Read full article



You May Also Like:

Democrats Had No Business Winning In Alabama John Podhoretz, New York Post

Republicans Have A Final Deal On Their Tax Bill — Here's What's In It Bob Bryan, Business Insider

Steve Bannon's Big Loss In Alabama Roger L. Simon, PJ Media

‘We Can’t Take That Risk’ — FBI Officials Discussed ‘Insurance Policy’ Against Trump Presidency Chuck Ross, Daily Caller

Report: Wait Times For Canada Gov. Health Care 128% Higher Than In ‘93 Bacchus Barua, Fraser Institute

The Left's 'Reverse Robin Hood' Tax Reform Narrative Is Bunk Bernie Marcus, The Hill

Illinois Drives People Away The Wall Street Journal

Double Standards And Distortions Heather Mac Donald, City Journal

Pete King Blasts ‘Disheveled Drunk’ Steve Bannon Bob Fredericks, New York Post

Report: Lawyer Caught Offering Woman $200,000 To Accuse Trump Of Sex Assault V. Saxena, Conservative Tribune

Government Should Leave Bakers Alone Ron Paul, Ron Paul Institute for Peace and Prosperity

100 Years. 100 Million Lives. Think Twice. Laura M. Nicolae, Harvard Crimson

Liberate Food Trucks [Watch] John Stossel, Townhall

While Everyone Was Distracted By Alabama Election, Senate Passed Tight Vote To Give Trump A Huge Victory Warner Todd Huston, American News Hub

Skyrocketing University President Salaries Paid For By Student Debt Brendan Pringle, Washington Examiner

As Robot Sales Increase, So Will Jobs For Humans Allan Golombek, RealClearMarkets

A New Stealth Attack In EU’s “War On Cash” Don Quijones, Wolf Street

For More go to the Home Page >>>

Join Our Email List



Bookshelf

FreeMarket Central

Some titles recent, all recommended -

Special Video Feature

FreeMarket Central

Voices From The 2017 International Students For Liberty Conference

In Search Of History

The Reagan Tax Cuts Worked

Thanks to "bracket creep," the inflation of the 1970s pushed millions of taxpayers into higher tax brackets even though their inflation-adjusted incomes were not rising. To help offset this tax increase and also to improve incentives to work, save, and invest, President Reagan proposed sweeping tax rate reductions during the 1980s. What happened? Total tax revenues climbed by 99.4 percent during the 1980s, and the results are even more impressive when looking at what happened to personal income tax revenues. Once the economy received an unambiguous tax cut in January 1983, income tax revenues climbed dramatically, increasing by more than 54 percent by 1989 (28 percent after adjusting for inflation).

 

-- Daniel J. Mitchell,

Shadow Stats Snapshot


FreeMarket Central

ShadowStats alternate economic indicators are based on the methodology of noted economist John Williams, specialist in government economic reporting.

  • Unemployment:
    FreeMarket Central BLS: 4.12%
    FreeMarket Central Shadow Stats: 21.7%
  • Inflation:
    FreeMarket Central November Year-to-Year: 2.04% (CPI-U*)
    FreeMarket Central Shadow Stats: 9.8%

*[cpi-u is the Bureau of Labor Statistics inflation rate for all urban consumers]