What ‘JFK and the Reagan Revolution’ Reveals About Trump

Donald Trump (photo credit: Darron Birgenheier via Flickr, CC BY-SA 2.0)

Remember prosperity? Want it back? Here’s the secret formula, which has always worked and would work again: Cut marginal tax rates and restore integrity to the dollar.

Donald Trump is campaigning on meaningful marginal tax rate cuts and implying, with his offstage praise of the gold standard, a solid instinct for monetary integrity and how to produce it. One hopes so as it requires both together.

Here’s the brief. Lawrence Kudlow and Brian Domitrovic have just published what deserves to be the most important book of the 2016 presidential election cycle: JFK and the Reagan Revolution: A Secret History of American Prosperity. It provides a solid understanding of the key issue of the 2016 race — the economy.

Reagan made “Supply-Side” famous by campaigning on and then enacting most of the Kemp-Roth 30% across-the-board tax rate cut. But John F. Kennedy was the original Supply-Sider. The book’s Big Reveal: Jack Kemp designed this tax cut as a direct copy of Kennedy’s own.

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Read the full article at Forbes.com.

Ralph Benko, internationally published weekly columnist, co-author of The 21st Century Gold Standard, lead co-editor of the Gerald Malsbary translation from Latin to English of Copernicus’s Essay on Money, is American Principles Project’s Senior Advisor, Economics. Continue Reading

Cruz, Rubio, Bush: Why the Missing Prosperity Crusade?

It’s a mystery worthy of Sherlock Holmes.

Most of the Republican presidential aspirants, mysteriously, are not focusing on the issue that all of the polling shows at the top of voter concern: restoring prosperity. This, not Donald Trump (who hits the theme rather brilliantly although his proposals to restore prosperity are pure Jabberwocky), is the real wrecking ball of this election cycle.

What’s going on? Elementary, Watson.

In the Sherlock Holmes story The Adventure of Silver Blaze Conan Doyle presented a conversation between a Scotland Yard detective and Holmes:

Gregory: ‘The dog did nothing in the night-time.’ Holmes: ‘That was the curious incident.”

Why aren’t the Republican candidates crusading for prosperity? Holmes: “Obviously the midnight visitor was someone whom the dog knew well.” So too do the candidates know, or believe they know, the “midnight visitor” behind our “sclerotic growth.”

And the candidates cannot bear to criticize that midnight visitor, their presidential predecessors. Follow along. …

Read the full story at Forbes.com.

Ralph Benko, internationally published weekly columnist, co-author of The 21st Century Gold Standard, lead co-editor of the Gerald Malsbary translation from Latin to English of Copernicus’s Essay on Money, is American Principles Project’s Senior Advisor, Economics. Continue Reading

Donald Trump’s Tax Plan: A $10 Trillion Debt Bomb

Donald Trump (photo credit: Gage Skidmore)

Donald Trump is no supply-sider, as is evidenced by his pro-tariff and restrictionist immigration stands. Supply-side, from its inception, is all about job growth and equitable prosperity. Both would be hurt by such autarkical prescriptions. Trump doesn’t get it.

His tax plan, while superficially supply-side in that it lowers rates somewhat, carries a heavier burden of proof than it has received from some veteran supply-siders. The mulligan given Trump is a tribute to the ever-sunny disposition and native optimism of most supply-siders. Trump and his tax reform plan drew mixed reviews even on the supply side from such thoughts leaders as Forbes.com’s own John Tamny, recently, in Did Republican Partisans Actually Read Trump’s Tax Plan.

The two kindest, and most astute, points noted in favor of the plan were made by Tamny, “Trump’s decision to not support the subsidization of capital investment is correct,” and by supply-sider Jeff Bell writing in APP’s ThePulse2016.com (whose sister organization I professionally advise) who observed “Unlike most recent Republican plans, Trump avoids single year expensing for corporate investment in new physical capital (machines and buildings). Though rarely highlighted by its advocates, it is so expensive it preempts the ability to cut personal rates very much, without huge projected deficits.”

Supply-side economics in its iconic Jack Kemp form is all about job creation and rising worker affluence. It’s fine if the rich get richer as long as the rest of us get richer too. That’s the American Dream. Trump’s version doesn’t offer that.

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Donald Trump Is No Supply Sider And His Tax Plan Isn’t Supply Side

Donald Trump (photo credit: Gage Skidmore)

Jeff, with all due respect to your observation that Trump’s plan for tax reform is “also the most faithful to supply-side principles,” there may be less here than meets the eye.  Trump is no supply-sider.  His mercantilist/protectionist tendencies on trade and restrictionist tendencies on immigration would, if enacted, profoundly retard economic growth.  Trump’s Supply Side credentials are beyond dubious.

As for his tax plan, it would be reckless to rely too heavily on Trump’s dubious claim that it “Doesn’t add to our debt and deficit, which are already too large.”  For supply-side deficit hawks (from the Reagan/Rueff/Lehrman wing of Supply Side) like us, this is really important.  Trump’s new tax plan as scored by the Tax Foundation would raise the national debt by $12 trillion over ten years. Trump’s claims of plans to make offsetting budget cuts are, even if (unproved) credible, far lower than the cost.

Mr. Trump claims that his plan would produce 6 percent GDP growth.  That, combined with spending restraint, would of course do it.  But where does he get the 6 percent?

Sounds like trademark Trump bravado, eerily similar to reports of his management of Trump Air: “He trotted out plans to attract customers—but many of them made no sense from a business standpoint. Those who worked with him at the airline describe him as a loose cannon….”  Trump Air, of course, was a notable failure.

Something in the Trump plan seems, if only to me, to have more, paraphrasing Colbert, “Supplysidiness” than true Supply Side.  Continue Reading

Trump’s Tax Plan: A Proposal Reagan Would Approve?

Donald Trump (photo credit: Gage Skidmore)

Donald Trump’s plan for tax reform is the most populist so far seen among the presidential candidates. It is also the most faithful to supply-side principles.

Why? Populism in its root meaning is optimism about the ability of people to make decisions affecting themselves. Its opposite, elitism, is optimism about the ability of elites to make those decisions for them.

Unlike most recent Republican plans, Trump avoids single year expensing for corporate investment in new physical capital (machines and buildings). Though rarely highlighted by its advocates, it is so expensive it preempts the ability to cut personal rates very much, without huge projected deficits.

Instead of single year expensing, Trump’s plan cuts business taxes to 15 percent and personal rates to zero, 10, 20, and 25 percent. Among other things, leaving business depreciation the way it is allows Trump to zero out income taxes for a single person earning under $25,000 and a couple under $50,000. This is, to say the least, an attractive prospect for tens of millions of non-rich Americans.

But populism is not just about popularity. Cutting taxes for individuals and families is a vote of confidence in the ability of ordinary people to make use of their income, rather than sending it on a round trip to government and other elites to decide what they need. It is far more like Ronald Reagan’s tax revolution, which focused on personal tax rate cuts rather than corporate incentives.

Reagan’s tax rate reductions, which saw the top rate on personal income drop from 70 to 28 percent between 1981 and 1988, were successful in both economic and political terms because they trusted the people to make good decisions. Continue Reading