The Benefits of Tax Reform Are the Defining Issue
By Lewis K. Uhler and Peter J. Ferrara, National Tax Limitation Foundation
Regardless of your reaction to the first Trump-Biden Presidential Debate on September 29, protecting tax reform is far-and-away the single most important issue that emerged for November 3.
Political pundit Karl Rove, writing in the Wall Street Journal following the debate put it this way:
“Mr. Trump’s biggest win was goading Mr. Biden into pledging to ‘eliminate the Trump tax cuts’. The president should now meet with those middle-class families whose tax cuts would be erased by Mr. Biden, so he can describe the fallout in a personal way”.
As we have been pointing out for months, the sharpest contrast between the two candidates and their respective party’s platforms can be found in educating Americans of every stripe and economic strata of the benefits to each individually and to our states and communities collectively of the prosperity and economic strength found in the 2017 Tax Cuts and Jobs Act.
It is the chief reason we launched earlier this year the NTLC Tax Reform Education Project. Developed to counter the false narrative from the New York Times and Washington Post that tax reform only aided wealthy corporations and Wall Street, the Tax Reform Education Project is focused on setting the record straight with the truth and facts at just the right time.
Complementing that effort, and Rove’s advice, are the following tax reform reports from key sources:
Consumer Confidence is up. The Conference Board Index announced consumer confidence surging to 23% from 21.4% in August and 16.5% in May.
The Bureau of Labor Statistics reported that in September, unemployment dropped to 7.9% from 10.2% in July and 14.7% in May. In September, the economy created 877,000 new jobs.
The Census Bureau also issued a review on “Income and Poverty in the United States” for 2019 which clearly shows that, pre-pandemic, President Trump’s economic success blew past that of any other presidency. Census reported that real median household income grew to $68,703 in 2019, an impressive 6.8% increase over 2018. It was the largest one-year increase in median income on record going back to 1967. It was also grew by 45 percent more in a single year ($4,379) than Obama/Biden produced in their entire 8 years in office ($3,021).
Continuing the trend from Trump’s first three years, the economic benefits were widespread. While the overall growth rate was 6.8%, real median income grew by an even greater 7.9% for Black Americans, 7.1% for Hispanic Americans, and 10.6% for Asian Americans. All record highs as were the new income levels for each of these groups.
Moreover, in 2019 the poverty rate plummeted 1.3 percentage points to a 60 year low of 10.5%. This was the largest reduction in poverty in over 50 years. It lifted over 4.1 million people out of poverty, the largest yearly decrease since 1966 as black American poverty fell by 2.0 percentage points, Hispanic poverty fell by 1.8, and Asian American poverty fell by 2.8, according to the White House Council of Economic Advisers (CEA).
And just as impressively, child poverty decreased to 14.4 percent, the lowest child poverty rate observed since 1973, down from 18 percent at the end of the Obama/Biden term.
Taking an even broader view over Trump’s first three years, between 2016 and 2019, real median household income increased 9.2% while the economy lifted 6.6 million people out of poverty, including launching 1.2 million black Americans out of poverty. That’s the largest 3-year poverty reduction for the start of any presidency since 1965 when the War on Poverty began.
But what about the left’s screech over “income inequality”? Surely, considering the media’s claims that Trump’s economic policies benefit only the rich, it must have increased. Well, it didn’t. Incomes grew and income inequality declined for the second consecutive year, as the share of income held by the bottom 20 percent of earners increased by 2.4 percent.
These pre-pandemic numbers show the true potential for all Americans embedded in President Trump’s pro-growth policies, particularly in comparison to the stagnation of the Obama/Biden era’s big government policies.
As we approach Election Day, we must remind ourselves that Joe Biden wants to reverse these pro-growth policies; repealing the Trump tax cuts, increasing regulations and growing the government in an expansion of the Obama/Biden policies that produced the worst economic recovery from a recession since the Great Depression.
President Trump wants to continue to rebuild the economy with the polices that produced the strongest labor market in modern times, including historically positive economic numbers. The outcomes could not make for a more stark election choice.
Lew Uhler is Founder and Chairman of the National Tax Limitation Committee and National Tax Limitation Foundation (NTLF). He was a contemporary and collaborator with Ronald Reagan and Milton Friedman in California and across the country. Peter Ferrara is Senior Fellow at NTLF. He served in the White House Office of Policy Development under President Reagan, as Associate Deputy Attorney General of the United States under President George H.W. Bush, and as the Dunn Liberty Fellow in Economics for King’s College in New York.