We both worked to help design and then get it passed through Congress Donald Trump’s 2017 tax-cut bill in 2017,
We’re proud because the overwhelming economic consensus, based on real-world evidence, is that the Tax Cuts and Jobs Act worked – even better than we predicted.
But after four years of the Biden-Harris administration’s inflationary policies, American workers have less savings, more credit-card debt and lower wages.
And as the election approaches, things could get worse for the working class: Vice President Kamala Harris could win and fulfill her promise to undo the Trump tax cuts.
Democrats dismissed the Trump tax cuts as “tax cuts for the rich,” but the evidence is clear: All Income gains were fueled by increases in take-home pay and a boom in the US economy.
Real wages for workers in the middle of the income scale increased by 4.9% – the fastest two-year increase in 20 years – and real median household income increased by $5,000 from 2016 to 2020.
Poverty rates and unemployment rates reached their lowest levels in 50 years, with the lowest levels ever seen among African-American and Hispanic workers and those without a high-school degree.
Americans earning less than $100,000 a year received an average tax cut of 16%, while the share of taxes paid by the top 1% increased.
How is this a “gift” to the rich?
It’s no coincidence that the best year for manufacturing-job creation in 21 years was the year immediately following the Trump tax cuts. Manufacturers added 263,000 new jobs, and manufacturing wages increased by 3%, an additional 2.8% increase over 2019.
Compare that record to Biden-Harris. Since Trump left office, real weekly earnings of middle-class workers have declined by about 3.6%, or an estimated $2,000 in annual purchasing power.
That’s because prices for most groceries, gas, utilities and housing costs are at least 20% higher. But salary payment has lagged behind.
This runaway inflation didn’t happen by accident, and it certainly wasn’t caused by Trump policies. Inflation was only 1.4% the month President Biden and Harris took office and began a $10 trillion spending spree with borrowing and printed money.
Worst of all, the ironically-named Inflation Reduction Act pumped billions of dollars into taxpayer-funded green-energy subsidies for the rich to buy luxury electric vehicles made with parts made in China.
Harris wants to go even further and cause more damage. Under his plan, a family of four making $75,000 would pay an extra $1,500 in taxes. A family of five, with two earners earning about $100,000, would have to pay about $7,500 extra in taxes. This would be the largest tax increase ever imposed on the middle class.
Trump’s tax relief in 2017 not only provided tax cuts to these families, but also made paying taxes easier. Over 90% of taxpayers opted to take double the standard deduction as required by law, reducing the need to file complex itemized tax returns.
Harris’ plan would be an immediate tax increase while increasing the burden and complexities of filing.
Harris says small businesses are the backbone of the economy and he promises to help them. In fact? Under his plan the small business tax rate would exceed 44%.
The Trump tax cuts provided a 20% small-business deduction that allows them to compete with larger corporations, which Harris would defeat. Small businesses will pay higher tax rates than some of the world’s largest corporations.
There’s an old saying that Democrats love jobs but hate employers.
They think they can tax American families and businesses for prosperity.
We would love to know when and where this has 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.”
(Tags to translate) politics
