The presidential election of 2016 has several target implications, one being the economy. Democrat nominee, Hillary Clinton, has indicated that she will raise taxes on those who the government considers wealthy and lower taxes on the middle class. On the other hand, Republican nominee, Donald Trump, has indicated that he will lower taxes for everyone, including lowering the corporate income tax rate to 15%. Clinton is counting on the old liberal mantra of tax the rich, lower the boom on those evil corporations, to resonate with the American public, particularly middle and lower income individuals. Trump is hoping to make a case for a stronger economy by lowering taxes, especially on businesses, by indicating that the economy will grow rendering widespread prosperity for all.
How many times have we heard the Democrat blather stating that President George W. Bush squandered the Clinton era budget surpluses and piled up deficits with expensive wars and tax cuts for the rich? It appears whenever a Republican proposes across-the-board tax cuts where everyone who pays income tax will get a tax cut, the Democrats always scream, “tax cuts for the rich, tax cuts for the rich.” According to the Washington Times in an article in February 2010, entitled, “Bush Tax Cuts Boosted Federal Revenue,” by Ryan Dwyer, Mr. Bush’s deficits were the product of spending, not tax cuts.
This Washington Times article went on to indicated that in 2003, President Bush cut the dividend and capital gains tax rates to 15% each and the economy responded. In two years, stocks rose 20% and $15 trillion of new wealth was created. The U.S. economy added 8 million new jobs and the median household wealth increased by $20,000.
What liberal tax-cutting opponents refuse to accept as truth is that the 2003 Bush tax cuts generated a massive increase in federal tax receipts. From 2004 to 2007, federal tax revenues increased by $785 billion, the largest four year increase in the history of the United States. Unfortunately, Congress spent these increases on domestic programs when the tax cuts could have paid for the wars in Afghanistan and Iraq. Thus, the tax cuts enacted by Congress in 2003 were an important cause of an economic expansion that roared for some 50 months and created 8.1 million jobs.
Fast-forward to when Barak Obama became president and his policies, which included a stimulus that crowded out private investment, an enormous healthcare reform bill, and a nightmarish financial regulatory package; all of which delayed economic recovery from the crash of 2008, and drove the unemployment rate to 9.1%, according to the Heritage Foundation.
When discussing economic implications liberals also love to refer to the Reagan years and undermine “Reaganimics,” also known as “trickle-down” economics. When Bill Clinton became president in 1993, the Democrats couldn’t wait to declare that “trickle-down” economics was over.
According to cato.org, the economy performed better during the Reagan years that during the pre and post Reagan years.
- Real economic growth averaged 3.2 percent during the Reagan years versus 2.8 percent during the Ford-Carter years and 2.1 percent during the Bush-Clinton years.
- Real median family income grew by $4,000 during the Reagan period after experiencing no growth in the pre-Reagan years; it experienced a loss of almost $1,500 in the post-Reagan years.
- Interest rates, inflation, and unemployment fell faster under Reagan than they did immediately before or after his presidency.
- The only economic variable that was worse in the Reagan period than in both the pre and post Reagan years was the savings rate, which fell rapidly in the 1980s. The productivity rate was higher in the pre-Reagan years, but much lower in the post Reagan years.
Liberals also continue to indicated that the Reagan tax cuts were a major cause of the budget deficits and the quadrupling of the national debt in the 80s. This is factually untrue. Real federal revenues grew at a faster pace after the Reagan tax cuts, than after the Bush and Clinton tax hikes. From 1982 to 1989, revenues expanded by 24.1 percent. Over a comparable seven-year period, 1990 – 97, a period that accounts for both the Bush and the Clinton tax increases, real federal revenues grew about 19.3 percent.
If the Reagan tax cut was not the major contributing factor to the increasing deficit in the 1980s, what was? According to cato.org, there were two primary explanations: (1) large and sustained defense build-up and (2) the unexpected rapid decline in inflation and the recession in the early 1980s.
Liberals are also quick to state that Bill Clinton’s economic record has outperformed Reagan’s. The growth rate under Clinton was 2.7 percent, a half percent below the 3.2 percent growth rate under Reagan and a full percentage point below the 3.8 percent growth rate during the 1983 to 89 expansion.
From 1981 to 1989, every income quintile, from the richest to the poorest, gained income according to the Census Bureau economic data. The reason the wealthiest Americans saw their share of total income rise is that they gained income at a faster pace than did the middle class and the poor. But Reagonomics did create a rising tide that lifted nearly all boats.
By 1989, there were 5.9 million more Americans whose salaries exceeded $50,000 a year than there were in 1981 (adjusting for inflation). Similarly, there were 2.5 million more Americans earning more than $75,000 a year, an 83 percent increase. And the number of Americans earning less than $10,000 a year fell by 3.4 million workers.
While every president has had his own economic policy, Democrats do lean toward raising taxes and punishing the rich, including businesses. Republicans, however, lean toward lowering taxes for everyone to expand the economy which will result in an increase in tax revenues to the government.
The 2016 presidential election is no different with same economic implications of past presidential elections. Furthermore, the economy is always front and center in a presidential election cycle regardless of other factors such as foreign policy, crime, immigration, right to life, etc.
Hillary Clinton wants to raise taxes on the rich and on those evil businesses, but promises to cut taxes on the middle class. Donald Trump is proposing tax decreases across the board, especially on corporations to create jobs and bring jobs back to America.
If you study the examples illustrated in this article, it is inevitable that Republican presidents Ronald Reagan and George W. Bush did more for the economy than presidents George H.W. Bush, Bill Clinton, and Barak Obama. I’ve always said that it took two brain cells to be a Republican while Democrats can operate on only one brain cell. This is one of the reasons. It takes a little more studying and deliberating to understand conservative/Republican economic philosophies.
With the baby boomers retiring, it is more important than ever that the economic implications of this presidential cycle are understood. More healthcare is going to be consumed, along with social security. Do we want our elderly suffering from lack of essentials because Social Security, something we all have paid into and were told we would receive when the time came? Do we want to elderly to go without much needed health care? Or do we want them to die out for lack of access to health care?
America, the above is your choice.