Hillary Clinton keeps bashing the Trump tax plan as “Trumped up trickle down economics.” This class warfare card has become the standard and tired response to every Republican tax plan reform for 30 years. No wonder we haven’t cleaned out the stables of the tax code since the Reagan era. Democrats have no interest.
Hillary’s claim is that the plan will blow a hole in the debt (which is rich coming from someone who worked for an administration that nearly doubled the debt in eight years) and that the benefits all go to the rich. She also says it will cost jobs and could even “cause a recession.”
I worked on devising the Trump tax plan with economists Larry Kudlow, Sam Clovis and others, so I know a little bit about the costs and the benefits. It’s an amazing ideology which says that letting businesses keep more of their own money will cause the economy to capsize and other horrors, but a $1.5 trillion tax hike on businesses and investors will, as Hillary promises, create jobs. Yes, and injecting Elmer’s glue into your veins is a good way to prevent a heart attack.
Let’s start with her claim that the plan will cost $5 trillion. That’s wrong. When taking into account the higher economic growth from the lower tax rates on businesses and workers, the plan’s “cost” is about half that size. The Tax Foundation finds the plan will raise the GDP growth rate by almost one percentage point over a decade, and that means lots of jobs and additional tax revenue for the government. The best way to balance the budget is to put Americans back to work.
The $2.5 trillion “cost” of the tax cut can and will easily be made up by cutting government spending. Over the next decade the government is expected to spend almost $50 trillion. Surely with sound business-like leadership, we can save 5 cents on the dollar.