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DEMOCRATS REVIVE THE “TRICKLE DOWN” SMEAR
Powerlineblog ^ | 11/17/2017 | John Hinderaker

Posted on 11/17/2017 6:51:20 PM PST by lasereye

In the 1980s, the Democrats reviled President Reagan’s tax cuts as “trickle-down economics”–a phrase they themselves had invented many years before. But the Reagan tax cuts produced the greatest boom in America’s modern history. The results were so sensational that Reagan carried 49 states when he ran for re-election in 1984.

That shut the Democrats up for a while, but bad ideas never go away forever. The Democrats are now trying to revive their “trickle-down economics” smear. In today’s White House press briefing, an unidentified reporter asked Dr. Kevin Hassett, Chairman of the Council of Economic Advisers, about the tax bills now pending in Congress:

What makes you think trickle-down economics is going to work this time when it hasn’t worked before?

Dr. Hassett answered the question more politely than I would have:

So trickle-down economics is something that, I guess, people who criticize the idea that taxes affect the economy will use to characterize approaches like the one that we’re pursuing. But I don’t think the idea that’s celebrated by even the non-partisan staff of the OECD — that if you have lower marginal rates, you get economic growth — is voodoo economics or controversial at all.

And yeah, the fact is that countries around the world have cut their corporate rates and had broad-based reforms, like we’re doing on the individual side, and then seeing economic growth result.

I don’t think there’s anybody who thinks that you’ll get no growth or negative growth for this. Maybe there are a few people. But in every economic model I’ve seen, you get growth — either a lot of growth, or sometimes if it’s a closed economy model, a little growth. But you get positive growth out of this. And that growth will benefit workers, and let’s talk about that.

So, right now, the way a U.S. firm avoids U.S. tax is they locate activity, say, in a country like Ireland instead of here. And so if you build a plant in Ireland, then you can sell the stuff back into the U.S. And when you sell the stuff back into the U.S., then it increases the trade deficit and doesn’t do anything for American workers, but it does increase the demand for Irish workers and drive up their wages.

And so what the President wants to do is cut the rate to 20 percent and build guardrails around the tax code so that people can’t transfer price — everything to Ireland anymore. And if we do that, then the people who benefit will be the workers here in the U.S. who have increased demand for their jobs.

That’s economics for dummies. But there are a lot of dummies in the White House press corps and the Associated Press. Thus, the AP followed up on the question from today’s briefing in an unusually ill-informed article by Paul Wiseman headlined: “Derided by critics, trickle-down economics gets another try.”

Coincidence? I think not. The White House transcript doesn’t tell us who asked the “trickle down” question. Was it one of Wiseman’s AP colleagues? I don’t know, but Wiseman’s Twitter feed tells us that he is a Democratic Party activist. One way or another, the Democrats have decided to try to revive their “trickle down” smear. Let’s take a brief look at Wiseman’s piece.

Does money roll downhill?

In their drive to cut taxes, President Donald Trump and congressional Republicans are betting it does.

Behind their legislation is a theory long popular among conservatives: Slash taxes for corporations and rich people, who will then hire, invest and profit — and cause money to trickle into the pockets of ordinary Americans.

It is certainly true that cutting marginal tax rates for corporations and individuals will increase investment and employment. But no significant Republican describes this as “trickling down,” a phrase invented, as Wiseman later admits, by Democrat Will Rogers.

The nonpartisan Tax Policy Center has found that the House tax plan would deliver an average tax cut of $360 for middle-income taxpayers in 2027. A far more generous bounty would go to the highest-earning 1 percent: An average tax cut of $62,000. For the top 0.1 percent, the gain would average $321,000.

This level of stupidity is enough to make you cry. Obviously, you can’t cut taxes that people aren’t paying. Currently, our tax code is so biased against upper-income taxpayers that they pay the overwhelming majority of income taxes. No developed country collects as much as we do, proportionately, from upper income taxpayers. If you cut income taxes, you will indeed benefit those who are paying them. Democrats somehow consider this to be scandalous.

It is entertaining to see the Associated Press/Democratic Party citing utterly uninformed and long-discredited sources from decades ago in their desperate attempt to stop tax reform:

Over the years, the concept — also known as supply-side economics — has frequently drawn ridicule.

“Voodoo economics” was the derisive term George H.W. Bush applied to it in his failed 1980 bid for the Republican presidential nomination against Ronald Reagan, a supply-side enthusiast.

This is painfully stupid. George Bush lost the 1980 nomination, obviously, and he was proved wrong by the subsequent success of Reagan’s economic policies. George Bush became an advocate for those policies, and he carried 40 states in 1988 when voters expected him to continue them.

The liberal economist John Kenneth Galbraith in 1982 likened the trickle-down idea to horse manure: “If you feed the horse enough oats, some will pass through to the road for the sparrows.”

John Galbraith was a flat-earth economist whose views have been proved wrong on just about every subject. It is remarkable to see the Democrats try to resurrect him in 2017!

In the view of Carl Davis, research director at the left-leaning Institute on Taxation and Economic Policy, the track record for supply-side economics “is not particularly inspiring.”

Where does the AP go for comment on the economic record of a president who won re-election by carrying 49 states? Of course, to a “left-leaning” organization, which no doubt is funded by a handful of rich liberals who stand to gain from leftist government policies.

How inspiring, to use Davis’s word, is the Reagan economic record? In 1983, US gross domestic product grew by 11.4%, and the following year by 9.3%. In 1985, by 7.4%. These days, the Democrats tell us that the 2% economic growth achieved by Barack Obama’s left-wing economic policies is the best we can do, even though Obama had the advantage of taking office just after a stock market crash and ensuing recession.

The Associated Press goes on and on, trying to discredit the Republicans’ tax reform proposals. But the facts are inescapable. The Democrats’ claim that the Obama administration’s 2% growth rate is the best we can do is ridiculous. Already since President Trump took office, the economy is growing at at 3% rate in anticipation of pro-growth policies coming out of Congress.

What will happen if pro-growth policies are actually enacted and signed into law? The sky is the limit. That is why White House press correspondents and Democratic Party news outlets like the Associated Press are desperately trying to block Republican tax proposals from being enacted into law.


TOPICS: Business/Economy; Extended News; Government; Politics/Elections
KEYWORDS: democrats; taxes
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1 posted on 11/17/2017 6:51:21 PM PST by lasereye
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To: lasereye

Mrs. Trump should start looking for a high school near the White House for Barron.


2 posted on 11/17/2017 6:54:32 PM PST by 2ndDivisionVet (You cannot invade the mainland US. There'd be a rifle behind every blade of grass.)
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To: lasereye

Democrats faked a yearbook, forged Roy Moore’s signature and paid several women to lie against Moore and Trump

The media and democrats are doing a coup in Alabama

Democrats are pure evil and they are all marxists.

And Hannity calls for Roy Moore to resign. I’m done with Hannity.


3 posted on 11/17/2017 6:55:02 PM PST by Democrat_media (Mueller doing coup vs Trump. Obama was adding 97,000 pages of government regulations /year)
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To: lasereye
But the Reagan tax cuts produced the greatest boom in America’s modern history. The results were so sensational that Reagan carried 49 states when he ran for re-election in 1984.

Trump is well on his way to doing the same thing so they need to dilute his success now with propaganda.

4 posted on 11/17/2017 6:58:31 PM PST by TigersEye (0bama. The Legacy is a lie. The lie is the Legacy.)
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To: lasereye

Reagan trickle down wealth was a lot better than obama trickle up poverty.


5 posted on 11/17/2017 7:01:07 PM PST by clearcarbon
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To: SkyPilot

The only trickle I’m feeling from the tax-shift (really a tax shaft!) bill belongs in a urinal.


6 posted on 11/17/2017 7:06:33 PM PST by lightman (ANTIFA is full of Bolshevik.)
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To: lasereye
Raising taxes on the middle class, destroying or capping most of their deductions, and making laws that cause home prices to drop is not exactly a formula for economic success either.


7 posted on 11/17/2017 7:08:37 PM PST by SkyPilot ("I am the way and the truth and the life. No one comes to the Father except through me." John 14:6)
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To: lightman
Yup.

Here is your postcard. They have eliminated those pesky deductions that previously took minutes of your and your CPAs precious time to put into a form. Now all you have to do is just send more your hard earned $$$ in to the IRS, so that Mark Zuckerberg can pay less in taxes.

I am sure you don't mind chipping in.


8 posted on 11/17/2017 7:14:15 PM PST by SkyPilot ("I am the way and the truth and the life. No one comes to the Father except through me." John 14:6)
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To: lasereye

I find I am reading the National Enquirer less and less as the weeks go by. All sex and child molesting.

I find myself watching Fox News less and less as the weeks go by. All sex and child molesting.

I find I am reading Free Republic less and less as the weeks go by. All sex and child molesting.

I miss our old Free Republic where politics was the primary focus.

Sigh ...


9 posted on 11/17/2017 7:14:41 PM PST by InterceptPoint (Ted, you finally endorsed. About time)
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Comment #10 Removed by Moderator

To: lasereye

Knowing the history, means acknowledging effects of the 1980-1982
tight-money policies of Fed Chairman Paul Volcker (a 1979 nominee by Carter) followed by huge loosening of M2 in 1983-1984.

The failure of OPEC in the mid-1980’s also boosted GDP significantly.

Systemic changes saw the decline of major industries such as textiles and auto manufacturing in favor of imports, retroactive amnesty for millions of illegal aliens in 1986, and a widespread termination of middle-class employee benefits such as pensions in favor of financing of merger and acquisition activities into 1987.


11 posted on 11/17/2017 7:17:35 PM PST by research99
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To: lasereye

It’s ALL they’ve got...


12 posted on 11/17/2017 7:19:12 PM PST by CMailBag
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To: clearcarbon

We are screwed. Such freaking RINO MORONS.


13 posted on 11/17/2017 7:33:43 PM PST by acapesket (all happy now?)
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To: InterceptPoint

Politics has become all sex and child molesting.


14 posted on 11/17/2017 7:42:49 PM PST by lightman (ANTIFA is full of Bolshevik.)
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To: Lurker
quite the god damned whining

If this bill gets defeated, I will post a gif of fireworks exploding in celebration. Then, I will tell you to “get to work” changing the immovable forces of government if you don’t like it, and for you to quit your whining. But unlike you, I won’t blaspheme God doing it.

15 posted on 11/17/2017 7:43:03 PM PST by SkyPilot ("I am the way and the truth and the life. No one comes to the Father except through me." John 14:6)
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To: InterceptPoint; Red Badger
Didja hear about this? Image and video hosting by TinyPic Our own Red Badger ate Chef Ramsay's sex dwarf.
16 posted on 11/17/2017 8:01:18 PM PST by tumblindice (America's founding fathers: all armed conservatives)
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To: lightman
Politics has become all sex and child molesting.

Well, they've been screwing the public since the very beginning.

17 posted on 11/17/2017 8:02:29 PM PST by ROCKLOBSTER (RATs, RINOs...same thing)
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To: lasereye

Bookmark


18 posted on 11/17/2017 8:04:24 PM PST by Fiddlstix (Warning! This Is A Subliminal Tagline! Read it at your own risk!(Presented by TagLines R US))
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To: ROCKLOBSTER
Well, they've been screwing the public since the very beginning.

That's why I call this tax bill a tax-shafting.

19 posted on 11/17/2017 8:09:55 PM PST by lightman (ANTIFA is full of Bolshevik.)
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To: clearcarbon

Eight years of ZERO net new jobs. That’s what Ozero gave us with his massive tax increases.

And let’s not forget that the “Great Recession” and the Wall Street collapse happened only because the productive class realized that we were about to elect an anti-colonial, foreign born, Marxist non-citizen as president. The smart money left the country in a hurry and is just now coming back.


20 posted on 11/17/2017 8:19:08 PM PST by GodAndCountryFirst
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