Donald Trump’s tax reform was the main legislative achievement of his first term. It made the tax code more efficient by reducing marginal rates and eliminating sundry carve-outs. This spurred faster economic growth and rising wages, which are why most Americans give him higher marks than Kamala Harris on the economy. So why is he now proposing to diminish that success by mangling the code?
The former President is still on net better on taxes than Ms. Harris, who supports $5 trillion in increases, including a 28% corporate rate, 44.6% top marginal rate and 25% tax on unrealized capital gains for “billionaires.” But Mr. Trump is losing the tax plot by promising all sorts of costly tax giveaways that will make it hard and maybe impossible to extend the pro-growth components of his reform.
Take the state and local tax deduction, which his reform capped at $10,000 per household. Mr. Trump vowed at a rally on Long Island this week to restore the deduction and save “thousands of dollars for residents of New York, Pennsylvania, New Jersey and other high cost states.” Did New York Democrat Chuck Schumer whisper that in his ear?
The pre-reform deduction made it politically easier for Democrats in high-tax states like New York to raise taxes by moderating the pain for their high earners. Taxpayers could write off all of their 10.9% state income tax rate and burdensome property taxes against federal taxes. SALT’s main beneficiaries were affluent taxpayers, as well as politicians and government unions in high-tax states.
Taxpayers in New York, New Jersey, Connecticut and California collectively claimed more than 40% of deductions in 2016—nearly four times more than those in Arizona, Georgia, Nevada, Wisconsin, Pennsylvania and Michigan. Very few in the latter states are harmed by the SALT cap because the 2017 reform also raised the standard deduction ($29,200 for couples).
GMU Econ alum Dominic Pino decries yet another of Trump’s economically ignorant ideas. A slice:
Donald Trump said during his rally in New York on Wednesday that if elected president he would put a “temporary cap on credit-card interest rates” of “around 10 percent.” He said, “We can’t let them make 25 or 30 percent.”
The vilification of lenders tends to be more Elizabeth Warren’s thing, but Trump is simply all over the place on policy, and it seems as though at every rally he’s liable to freelance a new bad idea that’s hard to take too seriously. The president doesn’t have power to make good on this promise, although Congress could pass a law (it would not actually happen).
If you look at Hughes’ net worth during his life (even without adjusting for inflation!), by all standard measures he was a vastly wealthier person than I am. But I would never be even slightly tempted to exchange my current standard of living for the standard of living Hughes had during his life. And 1967 isn’t exactly ancient history. One doesn’t have to look that far back to see how the luxuries of wealthiest people alive a generation or two ago couldn’t even begin to approximate what today is so abundant as to be considered trivial.
Reason‘s Eric Boehm explains that “immigration is better than industrial policy.” A slice:
We have heard a whole lot over the past eight years about the need to revitalize blue-collar America.
But factories don’t operate because presidents dump billions of borrowed dollars into places chosen for politically strategic reasons. Widgets don’t get made and the supply chain doesn’t keep churning along because the president orders it—no, not even if he uses the word “hereby.”
Mostly, the economy spins ever onward because individuals show up for work and produce something that other people—their employers, customers, clients, donors, etc.—value and are willing to pay for, and then they do it again the next day.
The much-maligned Haitian immigrants in Springfield, Ohio, which has become the center ring of America’s stupidest political circus over the past week, seem to have been doing exactly that: showing up.
“They are assembling car engines at Honda, running vegetable-packing machines at Dole and loading boxes at distribution centers,” The New York Times reported earlier this month. “They are paying taxes on their wages and spending money at Walmart. On Sundays they gather at churches for boisterous, joyful services in Haitian Creole.”
Sen. J.D. Vance’s (R–Ohio) recent criticisms of the Haitian immigrants in Springfield lacked “real knowledge of what the workforce situation in Ohio is,” Ross McGregor, CEO of Pentaflex Inc., which makes brake and axel parts for trucks, told Kevin Williamson for a must-read essay published this week by The Dispatch.
Juliette Sellgren talks with AEI president Robert Doar about think tanks and scholarship.
Steven Hayward argues that “the originalist revolution will never be complete until we fully appreciate the natural law roots of the common law.” Here’s his conclusion:
By degrees, it appears that originalism at the Supreme Court is slowly reviving key aspects of the natural law tradition found in what Jefferson described as “the elementary books of public right.” But it is being done in an indirect or circuitous manner, conspicuously avoiding direct mention of natural law, perhaps because the very idea of human nature itself has become so controversial in our wider culture. The originalist revolution will remain incomplete as long as this reticence persists, even while classic treatises persist, too. Thus originalists of whatever variety should hold off on declaring victory until this encouraging trend fully breaks out of its self-imposed box.
Current attacks on the justices’ ethics are bad-faith political barbs intended to undermine the Court—not expressions of genuine concern over actual transgressions. And the policy reforms being suggested to solve this nonexistent problem would do enormous damage to our most important legal institution while producing few, if any, countervailing benefits.
“Artificial Intelligence: Our Days (Probably) Aren’t Numbered.”
