Taxing America First

Back in early 2016, when Larry Kudlow and I suggested that then-presidential candidate Donald Trump proposed a 20% business tax rate for U.S. companies (down from the highest in the world rate of 35%), he enthusiastically endorsed this "America First" policy -- not because he loved corporate America but because he realized that as long as small and large American companies were paying the highest tax rates, jobs and factories would continue to move offshore.

We argued that the biggest beneficiaries would be American workers who would have access to more jobs and higher wages.

The liberal economists we debated on this disparaged the tax reform as "tax cuts for big corporations and the rich." They predicted that it wouldn't work.

In 2017, the tax cuts passed without a single Democratic vote. Now we would have a real-life scientific experiment on supply-side economics. Do lower tax rates generate more jobs and a better economy for all?

The issue isn't just academic. resident Joe Biden's folks -- the very same people who said the tax cuts wouldn't work -- now want to largely repeal the Trump tax reductions.

But here is what happened: By the end of 2019, and right before the COVID-19 pandemic, the U.S. had arguably one of the most prosperous economies ever, especially for those at the bottom of the economic ladder and for minorities. Not only did unemployment and poverty rates drop to near their lowest levels ever, but Black and Hispanic people saw the biggest income gains.

I remember visiting Trump in the Oval Office and telling him that the tax cuts had worked better than any of us had predicted. He sat back and said in his usual grandiose fashion, "Not more than I predicted." In hindsight, it seems clear that the tax cuts played a big role in cushioning the blow from the pandemic and the business shutdowns.

But what about the tax cuts for the rich mantra from the Biden and Nancy Pelosi crowd? Wrong!

The Congressional Budget Office just reported that federal corporate income tax receipts were up 75% this year to a record $370 billion. That brought total federal revenue to over $4 trillion, over 17% of gross domestic product for the first time in 20 years.

We also have learned that the share of taxes paid by the richest 1% of people such as Mark Zuckerberg, Bill Gates, LeBron James and Warren Buffett rose from 39% to almost 42% of the total. In other words, the rich paid more.

The irrefutable conclusion is that the scientific experiment in how to grow an economy worked. Big time. Yet those on the left who are always lecturing us about "following the science" have opted to ignore the science. Who needs science when it conflicts with political ideology?

If ever there were a policy that lifted all boats, it was the Trump tax cuts. The Biden tax policies to "soak the rich" threaten to capsize the economy. And that will hurt the poor the most. The question is: Do they even care?

Stephen Moore, an eminent economic writer and policy analyst, was born on February 16, 1960 in Illinois, United States. He was enrolled in the Saints Faith Hope & Charity School in Winnetka and in 1978, he graduated from New Trier High School. He earned his bachelors from the University of Illinois, Urbana-Champaign and later, his master’s degree in economics from George Mason University.

In 1983, Moore served as the Grover M. Hermann Fellow in Budgetary Affairs at the Heritage Foundation, a post he held for the next four years. In 1987, Moore was appointed as the research director of President Reagan’s Privatization Commission. Moore worked with the Cato Institute, a libertarian think tank, for a period of ten years. Moore was the senior economist of the U.S. Congress Joint Economic Committee where he had a significant responsibility in drafting the FairTax proposal. He has served two presidential commissions. He was appointed the Research director of President Reagan’s commission on Privatization. And later, in 1988, he served as a Special Consultant to the National Economic Commission.

In 1999, Stephen Moore founded the Club for Growth, an organization devoted to assist the Congress elect free market and tax cutting candidates. Moore served as the President of the club till 2004, and under his direction the Club attained the status of one of the major-league and prominent political organizations in USA. Under Moore’s leadership the club emerged as the biggest single money raiser for the Republican candidates in 2003. However, in December 2004, Moore was forced to resign after being ousted by the board.

Following his resignation from the club, Moore, in collaboration with Arthur Laffer and Mallory Factor, founded the Free Enterprise Fund. In 2005, he was offered a post on the editorial board of the Wall Street Journal which he accepted and left the Free Enterprise Fund. In 2007, for his services to enhance and advance economic understanding, he was awarded the Ronald Reagan “Great Communicator” award by the Republican Party.

Currently, Moore is a partner at the econometrics firm Arduin, Laffer & Moore Econometrics. In 2014, the Heritage Foundation invited Moore to join the think tank as chief economist. In 2015, he was given the position of the Distinguished Visiting Fellow at Heritage, Moore exerts his intellect on advancing public policies that help enhance economic growth in the US and maintain its position as the global economic superpower. His areas of research are budget, fiscal and monetary policy. He also serves as a contributing editor at National Review.

Stephen Moore has authored six highly acclaimed books including “Who’s the Fairest of Them All? The Truth About Taxes, Income and Wealth in America”, It’s Getting Better All the Time: The 100 Greatest Trends of the Last Century,” and “Government: America’s Number One Growth Industry.” His book, “Return to Prosperity: How America Can Regain its Economic Superpower Status” was a finalist for the F.A. Hayek book award for advancing economic understanding. Moore has also created controversy because of his literary works, for instance in 2014, he did a piece for Investor’s Business Daily titled “What’s the matter with Paul Krugman?“, he challenged Krugman’s work through an argument that was based on substantial factual errors. He also writes for the Wall Street Journal and is a daily economics commentator at Fox News, where he gives his analysis on the economy, fiscal policy and politics.

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