A Clinton Recession <br>Comes Into Focus <br>With Her Tax Hike Plan

This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.

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This economy may be perilously close to recession. That was the message of the second-quarter real-GDP report and its meager 1.2% growth rate. Over the past year, real GDP has slipped to a paltry 1.2%. Business investment continues to fall. Building and factory construction has dropped sharply. Productivity is flat. The profits recession is still in force.

And what’s the Hillary Clinton plan? Tax us into prosperity.

In her own words at the DNC on Thursday night, this is her fix: “Wall Street, corporations, and the super-rich are going to start paying their fair share of taxes.” Why? “Not because we resent success. Because when more than 90% of gains have gone to the top 1%, that’s where the money is.”

Let me get this right. In order to spur growth, Hillary intends to raise taxes on individuals, businesses, capital gains, stock trading, and firms that move overseas (which they do because America has the most uncompetitive tax system in the corporate world)? In addition, Hillary’s door is open for a carbon tax, higher payroll taxes, and a 25% gun tax.

She also argued in Philadelphia that the economy is not working the way it should because our democracy isn’t working the way it should.

Huh?

What she’s getting at is appointing Supreme Court justices who “will get money out of politics” and passing “a constitutional amendment to overturn Citizens United.”

Citizens United was about whether a not-for-profit could spend to circulate a film it had made that was critical of Hillary Clinton herself. It removed spending limits for super-PACs and labor unions, among others. And yet those mean and nasty super-PACs have thus far benefited from pro-Hillary hedge-fund contributions to the tune of $48.5 million, according to the Wall Street Journal.

Donald Trump, on the other hand, has received only $19,000 from hedge funds.

Get it? Citizens United, according to Hillary, is the source of our weak recovery and must be overturned. Meanwhile, she is the big beneficiary of the Supreme Court decision to allow unlimited political donations.

Next there are the recurring themes of class warfare and inequality, roots of evil according to Hillary. Turns out that the top 1% received a big share of income growth during the recovery. Okay, but it also suffered the biggest loss during the Great Recession.

Research from Scott Winship of the Manhattan Institute shows that during the recession, the top 1% lost 36% of its income while the bottom 90% lost 12%. Through 2014, the top 1% was still poorer by 18% than it was in 2000. That’s compared to a 9% decline for the rest of us.

According to Winship, income for the top 1% was basically no higher in 2014 than in 2000. Turns out that group bumped into the same income stagnation suffered by America’s middle class since 2000.

And according to new studies by Aparna Mathur of AEI, raising top marginal tax rates reduces growth incentives and yields few revenues. Yet in addition to higher tax rates, Mrs. Clinton wants $1 trillion in new spending programs.

The numbers also don’t add up for Mr. Obama, who defended his so-called recovery at the Democratic convention and even called Hillary Clinton, a 30-year member of the establishment, a change-maker.

Mr. Obama’s seven-year recovery averaged 2.1% real growth at an annualized rate. For historical comparison, after seven years, JFK’s economy increased by 5.4% yearly and Reagan’s by 4.5%.

Did JFK and Reagan beget long booms by raising taxes? No. They cut tax rates across the board. Hillary Clinton is a combination of Barack Obama 3.0 and Bernie Sanders 2.0. This is not change. This will not yield strong growth, lift jobs and wages, and make America more globally competitive.

A week prior to the DNC, Donald Trump offered a different perspective at the RNC: “America is one of the highest-taxed nations in the world. Reducing taxes will cause new companies and new jobs to come roaring back into our country. Then we are going to deal with the issue of regulation, one of the greatest job-killers overall. . . . We are going to lift restrictions on the production of American energy. . . . With these new economic policies, trillions of dollars will start flowing into our country.”

So Mr. Trump wants to reduce tax rates and regulations, unleash energy, and make America the most hospitable investment destination in the world. Mrs. Clinton wants to raise taxes, regulations, and spending, and put the energy sector out of business. (She would abolish coal and oil-and-gas fracking.)

No wonder the blue-collar, hard-hat, Democratic middle class is going for Trump.

Hillary Clinton is not an agent of change. Nor does she have any idea how to restore rapid economic growth. Instead, she is a prisoner of the Left. Tax the rich, inequality, redistribution.

If Donald Trump stays on his growth message, he’ll whoop her in November.


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