“I am in favor of cutting taxes under any circumstances and for any excuse, for any reason, whenever it’s possible. The reason I am is because I believe the big problem is not taxes, the big problem is spending. The question is, ‘How do you hold down government spending?’ The only effective way I think to hold it down, is to hold down the amount of income the government has. The way to do that is to cut taxes.” ~ The late, great Milton Friedman [emphasis mine]
Here’s definitely good news which is absolutely certain to make the liberal-leftist DemoMarxists squirm with unease and abject angst. There’s a dictum been floating around, it seems like forever (certainly since I was in college eons and eons ago) that goes: ‘The more the market is freed from government burdens the better the finances of that nation.’
In other words – Capitalism works. In the words of hashtag ‘terribleorv’ on one of the threads:
“We realize that straightforwardness has been in short supply during the disgraceful, lawless, and embarrassing, regime of Barack Obama. And, therefore, strong, not the obsequious words, of that foolish one, may seem unnatural to liberals, or phony Independents. But we have been extremely fortunate to have elected a new President, who looks you in the eye when speaking to you, instead of scraping, and bowing, to fancifully robed, despotic, kings.”[end]
Exactly. In the words of Thomas Lifson in his American Thinker and ‘Bad news for Dems: Trump tax cuts have led to increased tax revenue’ …
Democrats developed a sudden new concern with the size of budget deficits – something that failed to trouble them as Barack Obama doubled the national debt in just eight years – when President Trump’s tax cuts were first proposed. Nancy Pelosi assured us, “[T]his thing will explode the deficit.”
And the Congressional Budget Office, sticking to obviously incorrect static model thinking – i.e., that people don’t change their behavior when tax rates change – produced an estimate that the deficit would rise from $665 billion to $804 billion.
Now, data are out showing that, just as the Laffer Curve predicts, a reduction in tax rates produced such an increase on economic activity that tax revenues increased.
Investor’s Business Daily writes:
The latest monthly budget report from the nonpartisan Congressional Budget Office finds that revenues from federal income taxes were $76 billion higher in the first half of this year, compared with the first half of 2017. That’s a 9% jump, even though the lower income tax withholding schedules went into effect in February.
The CBO says the gain “largely reflects increases in wages and salaries.”
For the fiscal year as a whole – which started last October – all federal revenues are up by $31 billion. That’s a 1.2% in increase over last year, the CBO says.
The Treasury Department, which issues a separate monthly report, says it expects federal revenues will continue to exceed last year’s for the rest of the 2018 fiscal year.
The mainstream media are not going to point this out, but fortunately, President Trump is not in the least bit shy about pointing out his successes via Twitter and in public speeches. He has a ripe target here, and he can quote Pelosi and the rest offering phony warnings, and make the point that their concerns about confirming Brett Kavanaugh are equally fatuous.
Isn’t it amazing how often good news for Americans is bad news for Dems?
In the chart, Gov’t revenue is the left axis (y-axis). Tax Rate is the X-axis. As tax rates increase, see what happens. The fastest way to high gov’t revenue is to have a low tax rate, shown in the Red Line (Red as in Republican). The Blue curve shows that you can get to the same height of gov’t revenue with a really high tax rate. The gray curve represents the theoretical Laffer Curve (see link just above the graph in the column).
Now, if only a Republican controlled Congress would send President Trump an actual budget to sign instead of the usual omnibus. Republicans should have been poised to crush the Democrats in the upcoming midterms, but thanks to Ryan, McConnell, and the rest of their RINO herd they aren’t.
The good news is of course, that in recorded business history, there has never been a ‘tax cut’ that did not increase revenues and there has never been a ‘tax increase’ that did not result in reduced revenues. Tax cuts increased gov’t revenue EVERY TIME they were done which includes under Kennedy, Reagan, Bush and now Trump.
Milton Friedman was a genius when it comes to fiscal responsibility, and it would appear that President Trump has learned the good news lesson well, obviously measured by his own phenomenal success.
Now he’s applying it to the nation and the rest of the world. All in an effort towards MAGA!
H/T Thomas Lifson and American Digest