A new Fox News poll finds that voters, by a 20 percent margin, reject raising their taxes to support a bigger government welfare state.
Only 36 percent said that they would rather pay higher taxes to help fund a larger government that provides more services, while 56 percent said they would prefer a smaller government that provides fewer services.
At the top of their issues of concern, 78 percent of respondents listed the economy.
Other financially related concerns included the federal deficit at 65 percent; the amount paid in taxes, 63 percent; and being able to pay one’s bills, 58 percent.
President Joe Biden has proposed raising the corporate tax rate from 21 to 28 percent, and reportedly would like to raise the capital gains tax on wealthier Americans to over 40 percent, when combined with the Obamacare surcharge tax.
The non-partisan Tax Foundation determined the combined corporate tax — federal and state — under Biden’s plan would be 32.34 percent, up from its current 25.76 percent, which is slightly above the average of the Organization for Economic Co-operation and Development.
Whether we use corporate tax collections as a portion of GDP, average effective tax rates, or marginal tax rates, each measure shows that the U.S. effective corporate tax burden is close to or above the average compared to its OECD peers: https://t.co/EQ6GrJk52w pic.twitter.com/ymLFxJMEur
— Tax Foundation (@TaxFoundation) April 27, 2021
The Wall Street Journal reported that Biden would also increase the top capital gains tax from 23.8 percent to 43.4 percent.
Capital gains is the tax on investments, so Biden’s policy would be a disincentive to invest, which is what allows businesses to grow and to create jobs.
As with corporate taxes, states also tax capital gains meaning several of them, including California, New York and New Jersey, will have a combined rate of over 50 percent.
Under President Biden’s tax plan, 13 states and D.C. would have a top combined capital gains tax rate at or above 50%:
(57.3% Portland, OR) pic.twitter.com/GfWgBZhlbs
— Tax Foundation (@TaxFoundation) April 23, 2021
Lawrence Lindsey — a former Federal Reserve governor and director of the National Economic Counsel during former President George W. Bush’s first term– argued in a Sunday commentary for The Wall Street Journal that Biden’s capital gains rate increase would be taxing the “rich” for punishment’s sake since it would actually lower overall revenues to the federal treasury.
The economist explained there is an optimum rate to tax investment income to maximize revenue. Going beyond that rate becomes such a disincentive to invest that it means less activity and thereby less revenue to the Treasury.
Lindsey wrote that “43.4% is well above the rate that would generate the most revenue for the government.
“Congress’s Joint Committee on Taxation, which does the official scoring and is no den of supply siders, puts the revenue-maximizing rate at 28%. My work several decades ago puts it about 10 points lower than that. That means President Biden is willing to accept lower revenue as the price of higher tax rates.”
This truth about tax revenues is known as the Laffer Curve, named for economist Art Laffer, who advised both former presidents Ronald Reagan and Donald Trump.
Higher tax rates =\= more tax revenue. The laffer-curve is real pic.twitter.com/pJDoy9NLDF
— Carmen (@shammdog) April 22, 2021
Reagan’s time in office proved the Laffer Curve to be true, with revenues to the Treasury nearly doubling during the 1980s following major tax cuts.
His election in 1980 really was a direct response to the high tax, big-government policies of the 1960s, as typified by the Great Society under Democrat Lyndon Johnson.
Biden seems intent on reliving those “good ol’ days.”
Unemployment climbed to 7.5 percent by the time Reagan took office in January 1981. It would top out at over 10 percent in the early years of his presidency before his economic policies took effect.
By 1983, following across-the-board tax cuts, the economy began to boom with 3.5 million new jobs created that year, followed by 3.9 million in 1984.
Over 18 million jobs were created during Reagan’s time in office versus 11.6 million during former President Barack Obama’s two terms, though there were approximately 80 million more people living in the country.
“There was a reason Reagan called his [re-election] advertising campaign ‘Morning in America’ because in the ‘70s and the early ‘80s it didn’t feel as though we were in morning in America. There was kind of a purgatorial, afternoon feel to the country,” Amity Shlaes, the author of “Great Society: A New History,” told The Western Journal last summer.
Shlaes lamented the real-world impact of big government policies.
“The private sector had a lot of possibility but wasn’t able to realize it. So it was an incredible tragedy that we could have created jobs and we didn’t,” she said.
“An emphasis on redistribution instead of [economic] growth, an emphasis on result instead of opportunity, a misguided sentimental poverty policy that reduced effectively … the way that we emerged from poverty,” Shlaes observed are what made the Great Society in the end an overall failure.
The same dynamic was in effect under the Obama/Biden administration just a decade ago.
CNN reported that Obama oversaw the slowest economic recovery since World War II after raising taxes and enhancing the welfare state.
The Americans polled by Fox News are right: lower taxes and less government is the way to go.