The “Journal Editorial Report” is one of my regular weekend shows, and this week’s edition was especially good as the team dissected and enthused over the details of Trump’s tax plan:
Not only did the editors like the plan overall, for its simplicity and potential to grow the economy, but they skewered the predictable and lame efforts of the New York Times to label it “tax cuts for the rich.” Host David Asman held up “Exhibit A,” NYT’s front page: “Tax Overhaul Would Aid Wealthiest,” as an example, but a little later, as James Freeman was explaining that the plan would strip out the $100Bn in subsidies that residents of low tax states pay to residents of high tax states, Asman said “Bingo!” no wonder the NYT is so upset – they get to pay the full cost of living in a profligate state (and city).
You see, under Trump’s proposal, not only are tax rates lowered and simplified, but nearly all deductions are removed, except for a doubled personal deduction, mortgage interest, and charitable contributions – GONE are deductions for state and local taxes, so instead of rich blue state residents getting a discount on Federal taxes to offset their profligate state government’s grab, they’ll have to pay full whack for both, while residents of more frugal jurisdictions will be paying a smaller share of the Federal tithe. Do the math for New Hampshire, for example: Instead of deducting your property taxes from your taxable income, your standard deduction would be an extra $12,000 (for a couple), so to be worse off, you’d need to be paying property taxes over 12 grand – a very small percentage of NH citizens fall into that category!
And that wasn’t all – to a person, the panel praised the pro-growth, supply-side, nature of the Trump tax plan, and explained that we’ve learned the only way to get out of government debt is to grow the economy faster than the debt, and this plan will do the job. And as for that mostly benefiting the ‘rich’ the team reminded us that during the Reagan boom, the rich got about 12% richer, and the poor got almost 12% richer, too (see graphic). Furthermore there were kind words for Trump economic advisor, Gary Cohn, who seems to be straight out of Goldman’s central casting, and was even a Democrat, and yet here he is presenting, and feistily defending, a Reagan-style, supply side, pro growth, tax plan, and telling the media not to bet against Trump on this one.
Then there was the moment when Asman went after the naysayers: Democrats, and some Republicans, say this is going to increase the debt… “Where Have They Been!! for the past eight years, as the debt has grown from $10T to $20T, and that was by raising taxes, by the way!”