Your Vote Will Determine Your Taxes

On Monday, PJ Media posted an article detailing changes they want to make in America’s tax code if President Biden is re-elected.

The article reports:

“The main goal here is this can’t just be a debate about the 2017 tax cuts,” Sen. Mark Warner (D-Va.) said, completely unshy about the threat. He told Bloomberg last week, “This is going to be Tax Armageddon.”

Prepare for the end of the world.

Federal income tax revenues jumped nearly $100 billion in the first year after Trump’s signature tax cuts went into effect and almost another $40 billion in 2019. The stupid and unnecessary COVID-19 lockdowns derailed that growth in 2020. Since then, revenues have continued to surge. Much of that “growth” was an illusion created by inflation, however, and the rest was due to increased taxes on energy and corporations which, of course, got passed on to consumers. 

Reminder: Corporations don’t pay taxes; they collect them.

But Democrats are just getting started. The tax man never merely cometh for “the rich.”

Washington has a spending problem, and Democrats aren’t shy about how to solve it: tax us poor bastards back to the Stone Age.

There are two issues at play here. 

The first is that Democrats have a desperate need to wipe out the Trump tax cuts because Orange Man Bad, although they hide it under the usual guise of “taxing the rich.” 

…The second issue is the Democrats’ longstanding desire to impose an unconstitutional wealth tax.

Sen. Ron Wyden (D-Wa.) chairs the Finance Committee and last Thursday “revived his pitch to tax the appreciation of assets for those with at least $100 million in income,” the Wall Street Journal reported. “Wyden plans to run through the door on wealth taxes that the Supreme Court left open Thursday in its lamentable decision in Moore v. U.S.”

Please note that in the third paragraph I quoted, the article reported that tax revenues jumped after President Trump cut taxes, so why do the Democrats want to raise taxes? Because in Washington, the more money you control, the more powerful you are. Who cares about the American taxpayer or reducing the deficit when you can have power?

If the Democrats take Congress or the Presidency, we can expect at least a serous attempt at increased taxes. Remember the Laffer Curve.

Exactly Who Pays Our Taxes?

On Monday, The Washington Examiner posted an article about the progressive tax code in America. Just for the record, we are already overtaxing the wealthy.

The article reports:

The ultra-wealthy are paying the highest average share of taxes, according to a new analysis from a nonpartisan congressional committee.

The Joint Committee on Taxation found that the top 1% of earners pay an average tax rate of around 30% in combined income, employment, and excise taxes, double or more than the share of taxes that the bottom 80% of the country pays. Additionally, the top 5% of earners in the United States make up a whopping 46% of the country’s tax base.

According to the Economics Help page:

The Laffer Curve states that if tax rates are increased above a certain level, then tax revenues can actually fall because higher tax rates discourage people from working.

This is a picture of the Laffer Curve:

The Reagan tax cuts increased federal revenue. Unfortunately, the Democrats who controlled the House of Representatives offset those increases with increased spending. The Trump tax cuts also increased federal revenue, but again the House of Representatives increased their spending. At some point we need to realize that we don’t need more taxes, we need less spending.

The Biden administration is currently pushing for a tax on unrealized capital gains. The talking point is that it would only impact a very small number of taxpayers. Just for the record, this was the argument used to justify the establishment of a federal income tax in 1913.

It’s The Spending, Stupid!

On Tuesday, The Daily Caller posted an article about federal spending. If the average American family spent money the way the government does, they would be bankrupt within six months.

The article reports:

The U.S.’ national deficit surged in February as income declined and expenses rose, resulting in the federal government spending more than double what it collected in the month, according to a release from the Treasury Department.

The federal government collected $271 billion in February, mostly through taxes and social insurance and retirement payments, but spent $567 billion, a difference of $296 billion that was funded by an increase in the national debt, according to the Treasury Department. The gain in February brings the total national debt increase in fiscal year 2024 to $828 billion, which began in October 2023.

Remember–we have to pay interest on that debt.

The article continues:

At the end of February, the national debt totaled $34.71 trillion, with $27.38 trillion of that being held by the public and $7.09 trillion being held by other government organizations, according to the Treasury. The federal government recently passed the $34 trillion debt mark right before the start of 2023.

The government has already paid $433 billion in gross interest expenses in fiscal year 2024, far higher than the $306 billion that had been paid at this point in the last fiscal year, according to the Treasury. For the current fiscal year, the Treasury anticipates that it will pay over $1 trillion in just interest costs.

The article concludes:

A Biden administration official claimed that 90% of the non-emergency increase in the debt-to-GDP ratio since 2001 has been the result of tax cuts, the official told the Daily Caller News Foundation in response to a request to comment. The official argued that Biden’s recently proposed budget would reduce the national deficit by $3 trillion through taxing wealthy individuals and big corporations.

If President Joe Biden’s budget proposal is enacted, it is estimated that the debt would increase to $42.5 trillion by the end of fiscal year 2028, around the time his presumptive second term would end.

Can we please have a President who understand the Laffer Curve and economics!

“Get Off My Lawn,” He Shouted

Last night I watched the State of the Union Address. I watched the entire speech and the rebuttal. I learned that to our ‘representatives’ and the elites in Washington, the most most important issues are Ukraine and January 6th. In the rebuttal, I learned that the four things important to Republicans are our southern borde5r, conflicts overseas, inflation, and crime–not necessarily in that order. When the State of the Union Address was over, I felt like someone had yelled at me for an hour and a half. The speech proved that President Biden does have the energy to give an hour and a half speech. It also left many Americans wondering if there were drugs involved.

In his speech, the President needed to allay doubts about his cognitive abilities. He also needed a reset from his image as a tired old man. He did a reasonable job on both counts as long as you ignored the yelling and the slurred speech near the end of the address.

There were a number of lies told during the speech. January 6th was not an insurrection–there were no guns involved and no one has been convicted of insurrection. The President did not inherit a struggling economy–he inherited low inflation, low interest rates, energy independence, and an economy on the rebound from the Covid lockdowns. A large number of the jobs he claims to have created were simply people returning to the jobs they held before the Covid lockdowns. I would also like to note that many of the jobs currently being created are part-time jobs. During the past two months, the number of full-time jobs has significantly decreased. The President also claimed that crime is down under his administration. That is simply not true, although much of the increase in crime is due to Democrat-run cities who have eliminated bail and are not keeping criminals in jail. In New York, the National Guard has been called up to patrol the New York City subways because crime has become a serious problem there.

Also, why was there a fence around the Capitol, but not a wall at our southern border? Do fences and walls work or do they not work? There was also a comment about increasing taxes on corporation and on the wealthy. Corporations do not pay taxes–they pass them on to their customers, fueling inflation. “Taxing the rich” is a proposal that simply feeds class envy. If you want to see the results, look at the Laffer Curve. I would also like to note that during the Obama administration, General Electric paid no income taxes. Why weren’t they sharing the burden?

The speech was loud, inaccurate, and divisive. The tone was not attractive. I do wonder if this speech, which seemed more like a campaign speech than a State of the Union Address, actually won over any undecided voters.

The Laffer Curve At Work

On Tuesday, Just the News posted the following headline:

Federal revenue falls $416 billion from this time last year despite passage of IRA

This is the Laffer Curve:

What is illustrates is the fact that after the government raises taxes past a certain amount, tax revenues fall. That is because the people whose taxes have been increased have more incentive to find ways to move their income to places that are taxed less.

For example, 93.1FMWIBC reported the following in April 2021:

Mr. Biden and his wife, Dr. Jill Biden, routed their book and speech income through S corporations, according to tax returns the couple released this week. They paid income taxes on those profits, but the strategy let the couple avoid the 3.8% self-employment tax they would have paid had they been compensated directly instead of through the S corporations.

Questionable, but probably legal.

Just the News reports:

Scott Hodge, president of the Tax Foundation, told Just the News that some of the tax credits in the IRA, like the clean vehicle credit and solar tax credit, are in effect right now and will cost billions. “In the short term, the IRA is generating little new revenue because of the delays in implementing the 15% minimum tax so the green energy credits are costing taxpayers billions,” he said.

Hodge pointed out that the IRS enforcement plans were delayed because of the debt ceiling deal reached by President Biden and House Speaker Kevin McCarthy, adding that the IRS hasn’t fully implemented the 15% minimum corporate tax until the agency finalizes the enforcement rules.

“If we look at Treasury’s monthly report, the drop in individual income tax receipts is the biggest factor for the overall decline in federal receipts. They are down by $438 billion alone,” Hodge told Just the News.

“My guess is that much of that may be due to the slower economy and lower capital gains tax collections because of the slumping stock market. Corporate income taxes are higher than last year as are payroll taxes such as Social Security, so those are not a factor,” he added.

There is a tipping point. When corporate taxes get too high in America, corporations go elsewhere.

Can The Economy Prosper When Taxes Are High?

On Monday, The Washington Examiner posted an article with the following headline:

Debunking the myth that the US once prospered despite extremely high taxes

The article explains how the tax system in the 1960’s was very different from the tax system today:

Left-wing politicians who demand higher taxes on the rich argue that the U.S. had previously prospered when tax rates were very high, proving that high taxes do not harm the economy. And it is true: In the 1950s and early 1960s, the top federal personal income tax rate in the U.S. was a horrendous 91%, after which it was lowered to 70%. Under former President Ronald Reagan, it was then successively reduced to 28% by 1988 (before being raised several times and then lowered again under former President Donald Trump).

However, as Phil Gramm, Robert Ekelund, and John Early show in their book The Myth of American Inequality, “The top income tax in 1962 was 91 percent. After deductions and credits, only 447 tax filers out of 71 million paid any taxes at the top rate. The top 1 percent of income earners on average paid 16.1 percent of their income in federal and payroll taxes while the top 10 percent paid 14.4 percent and the bottom 50 percent paid 7.0 percent.”

Even when the top tax rate was lowered to 70%, not much changed. Only 3,626 out of 75 million taxpayers actually paid taxes up to 70%. Interestingly, the actual percentage paid by the top 1% of earners in the U.S. was only 16.1% in 1962, when the top marginal rate was 91%. However, in 1988, when the top rate was only 28%, the percentage paid by the top 1% of earners had risen to 21.5%! As the top tax rate fell by two-thirds, the percentage of their income that the top 1% of tax filers paid in federal income and payroll taxes rose by a third.

The article concludes:

This growth was a direct consequence of Reagan’s deregulation and tax reform policies in conjunction with falling oil prices. The growth rate in the 1980s was higher than in the 1950s and 1970s, though substantially below the growth rate of 5% following John F. Kennedy’s 1964 tax rate cuts of 30%.

This growth, along with the elimination of numerous deductions and exemptions, led to a sharp increase in tax revenues. Exactly what Reagan had predicted now came to pass: At a press conference in October 1981, Regan quoted the 14th-century Muslim philosopher Ibn Khaldūn’s foreshadowing of the Laffer Curve theory, as this effect is called in economic jargon: “In the beginning of the dynasty, great tax revenues were gained from small assessments. At the end of the dynasty, small tax revenues were gained from large assessments.” Reagan added: “And we’re trying to get down to the small assessments and the great revenues.”

So the myth that the U.S. experienced strong economic growth when the top marginal tax rate was high is false. In fact, the top marginal tax rate was only nominally high because there were so many exemptions, loopholes, and deductions.

Higher taxes slow economic growth. The Laffer Curve is real.

A Bridge Too Far

On Tuesday, The Hill reported that Senator Joe Manchin has stated that he does not support President Biden’s plan to tax the unrealized gains of billionaires, which would set a new precedent by taxing the value an asset accrues in theory before it is actually sold and converted into cash.

The article quotes Senator Manchin:

“You can’t tax something that’s not earned. Earned income is what we’re based on,” he told The Hill. “There’s other ways to do it. Everybody has to pay their fair share.”

“Everybody has to pay their fair share, that’s for sure. But unrealized gains is not the way to do it, as far as I’m concerned,” he added.

Manchin’s opposition means Biden’s proposal is likely dead only a day after the White House unveiled it.

It could be significantly restructured to avoid taxing unrealized gains, which would pose the big challenge of trying to make up the lost revenues.

The article notes:

The problem with taxing just the regular income of billionaires is that many of the nation’s richest individuals, such as Jeff Bezos and Elon Musk, have been able to pay little or nothing in income tax by not declaring income.

Instead, the ultra-rich often can take out loans secured by the value of their assets to finance their lavish lifestyles.

“Here’s what they do. They go to their accountant. They tell their accountant, ‘Make sure I don’t make any income, any salary.’ And then they say, ‘Make sure I can buy, borrow and die.’ And nobody knew anything about that years ago, and now people are pretty up on it,” said Senate Finance Committee Chairman Ron Wyden (D-Ore.), who has announced his own proposal to tax the unrealized gains of billionaires.

Wyden says that imposing a minimum 20 percent tax on billionaires is about making sure they pay a similar percentage of their wealth in taxes as middle-class Americans.

Raising taxes does not generate revenue–lowering taxes generates revenue. All that raising taxes does is give Washington bureaucrats more money and thus more power. The Democrats need to study the Laffer Curve.

Actions Have Consequences

Yesterday The Washington Examiner posted an article warning of the consequences of passing the Biden administration’s infrastructure bill.

The article reports:

We are often told to “follow the science.” This is true of wearing masks, how we teach children to read, and addressing the perils of climate change. So we should probably better do the same with the economy, no?

Consider the new Congressional Budget Office report on that very thing, the budget, the economy, and how we tax it. Let’s assume that we want the Federal government to spend lots more money on infrastructure. I don’t, because I’m certain that the money will be sprayed up the wall like the last few trillions were.

Still, the CBO report is useful in laying down the basic science of taxation. Whatever we tax, we’ll get less of. Tax corporations and there will be less corporate activity. Tax the income from capital investment and there will be less investment. Tax labor incomes and fewer will work so hard to make that money. Put simply, if people get less from doing something, they’ll do less of it. Toddlers grasp this: they will do more for two pieces of candy and less for one. In the jargon these are known as “deadweights.” That is to say, things that do not happen, economic activity that is wiped out by taxation.

Yes, it’s true that we can buy lovely things with the money that has been taxed, or at least we might. But it is still true that the act of taxing itself reduces economic activity. Worthwhile tax and spend is defined as that which is even more lovely in its results than what we’ve lost by financing it.

The Democrats seem to be unaware of the Laffer Curve. That is the principle that says that after people who produce wealth are taxed to a certain point, they will stop producing wealth. We will reach a point where the only way to pay for our bloated government is to devalue our currency. That is happening to some extent right now. The result of that will be hyper-inflation and a total collapse of our economy. That is the end result of unbridled tax and spend programs.

This Is Really Not Surprising

The Gateway Pundit posted an article today about Bernie Sanders’ plan for healthcare for everyone.

The article reports:

Bernie Sanders is proposing a new wealth tax on billionaires called the ‘Make Billionaires Pay’ act.

He wants to tax wealth they have generated during the Coronavirus pandemic, to fund healthcare for all Americans for one year.

Only for one year?

The article includes some information from CNBC:

Sen. Sanders proposes one-time tax that would cost Bezos $42.8 billion, Musk $27.5 billion

Top tech leaders and other billionaires would be forced to hand over billions of dollars in wealth they’ve gained during the coronavirus pandemic under a new bill introduced by Sens. Bernie Sanders, I-Vt., Ed Markey, D-Mass., and Kirsten Gillibrand, D-N.Y.

The “Make Billionaires Pay Act” would impose a one-time 60% tax on wealth gains made by billionaires between March 18, 2020, and Jan. 1, 2021. The funds would be used to pay for out-of-pocket health-care expenses for all Americans for a year. As of Aug. 5, the bill would tax $731 billion in wealth accumulated by 467 billionaires since March 18, according to a press release. If passed, the bill would tax billionaires on wealth accumulated through the end of the year, however.

Under the bill, tech and other business titans who have seen their wealth shoot up during the pandemic would take huge charges. Amazon and Walmart, for example, have both seen their stocks grow as Americans increasingly relied on their services during stay-at-home orders during the pandemic.

Does anyone remember that Bernie Sanders wanted to tax all millionaires until he became one? The thing to remember here is that billionaires have tax accountants who know how to move money around so that it is not taxable. What happens next is that the program that the tax on billionaires is supposed to fund goes into effect and does not have the money to fund it. At that point, the ‘little people’ like us have to pick up the slack in taxes to pay for the program because we don’t have tax accountants that know how to move money around to avoid taxes. Eventually the middle class pays for all tax increases aimed at the rich. Bernie Sanders and his friends need to study the Laffer Curve. The Bernie Sanders plan is a surefire way to get corporations and their executives to move money overseas (just after President Trump has managed to bring a lot of that money back into America).

 

 

Elections Have Consequences

Yesterday The New York Post posted an article about the recent Democrat primary races in New York State.

The article reports:

A half-dozen insurgent candidates in Brooklyn and Queens — some backed by the Democratic Socialists of America — toppled veteran incumbents in Democratic primary races, including close allies of Assembly Speaker Carl Heastie (D-Bronx).

With Heastie’s backing, the Democratic Assembly Campaign Committee poured more than $400,000 combined to prop up 46-year veteran Joe Lentol, Felix Ortiz and Walter Mosley in Brooklyn and Aravella Simotas, Michael Den Dekker and Michael Miller in Queens.

They all lost.

Insurgent Zohran Mamdani, who defeated four-term incumbent Simotas in the 36th Assembly District covering Astoria, said in a tweet: “Socialism won.”

He was endorsed by the DSA.

The DACC donated $125,000 to Simotas’ re-election campaign.

So what does this mean for the State of New York? Emily Gallagher, one of the socialists elected stated, “I’m ready to get to work.” She has already stated that she would push to raise income taxes on the “top one percent” to preserve services, adding, “We need the revenue to survive.” Someone needs to tell her about the Laffer Curve.

The article concludes:

Meanwhile, five other progressive Democrats backed by the WFP (Working Families Party) and other progressive groups are expected to win open Assembly seats.

The newcomers are expected to raise hell, but Albany watchers said the jury is out on how much impact they will have in a body with more than 100 Democrats — including many moderates representing suburban and upstate districts.

“Clearly the candidates who won have a more liberal, progressive agenda,” said University of Albany political science professor Bruce Gyory.

He said he believes Heastie’s position as speaker is secure.

Heastie personally called all the winning insurgents to congratulate them.

All the candidates are running in heavily Democratic districts and are expected to prevail in the general election.

There is actually some good news here. A group is arising out of the Democrat party that will eventually form a third party (to the left of traditional Democrats). As the results of their policies become obvious, they will lose votes. If any of the tax increases and other policies of these recently elected Democrats are put in place, I predict that New York State will lose its tax base.

According to a Forbes Magazine article in January 2020, New York was already leading the nation in the number of people leaving the state:

Actually, I am surprised that California did not make the top ten states losing population.

 

Did Making Marijuana Legal Solve Any Problems?

Red State Observer posted an article today about the seizure of two tons of marijuana and $1 million in cash from an illegal growing operation in Southern California that was being run by an organization from China. Keep in mind that recreational marijuana use is legal in California, but the state has levied such high taxes on it that illegal growing and distributing operations are flourishing.

The article reports:

Nineteen people were jailed on suspicion of maintaining a drug house, theft of utilities, marijuana cultivation, marijuana sales and conspiracy, the Riverside County Sheriff’s Department said. Authorities served 23 search warrants that resulted in the arrests of residents of Hemet, San Jacinto, El Monte, Rialto, Rosemead, Arcadia and Calexico.

Search warrants also were served in Corona, Eastvale, South El Monte, West Covina and Lower Azusa.

Some 20,000 plants were eradicated and 100 pounds of processed marijuana was seized, a news release said. Deputies also confiscated equipment that can be used in growing operations, including 338 fans, packaging and 620 lights. Southern California Edison found an illegal electrical bypass underneath the electrical meters at 15 indoor grows, the release said.

Deputies froze 25 bank accounts containing an undisclosed amount of U.S. currency.

The searches culminated a four-month investigation into a drug trafficking organization. The San Jacinto Sheriff’s Special Enforcement Team, as it served previous warrants, determined that all the operations were being financed by the same group in the Los Angeles area.

The Los Angeles and San Bernardino counties sheriff’s departments, Hemet Police Department and Riverside County District Attorney’s Office assisted.

Legalizing marijuana may have theoretically brought the tax revenue to the state that they were seeking, but when the state continued to raise those taxes, the illegal marijuana industry began to reemerge. California needs to learn the lessons of the Laffer Curve.

A Well-Deserved Honor

Steven Hayward posted an article at Power Line Blog today about a Presidential Medal of Freedom that President Trump will be awarding to Arthur Laffer, the father of the Laffer Curve.

So what is the Laffer Curve. The International Finance website defines it as follows:

The term “ Laffer Curve” was coined by Jude Wanniski (former associate editor of the The Wall Street Journal) in 1978 when Wanniski penned an article named “Taxes, Revenues and the Laffer Curve”. In December 1974, Wanniski who was the associate editor of The Wall Street Journal along with Arthur Laffer, Professor at the Chicago University, Donald Rumsfeld ( Chief of Staff of to President Gerald Ford) and Dickey Cheney (Rumsfeld’s deputy) were discussing President Ford’s WIN (Whip Inflation Now)  proposal for tax increases at a restaurant in Washington, Laffer grabbed a napkin and a pen and sketched  a curve on the napkin illustrating the tradeoff between tax rates and tax revenues, Wanniski later named it as the “Laffer Curve”.  A humble and honest academician who served Former U.S. President Ronald Reagan’s Economic Advisory Board, Arthur credited the theory to 14th century Muslim scholar Ibn Khaldun and eminent Economist John Maynard Keynes.

This is what the Laffer Curve looks like:

127464b5194cbef69a

The “Laffer Curve” is a theoretical curve showing the relationship between applied income tax rate and the resulting government revenue. The theory propagates the following points:

    • A tax rate of zero would result in zero government revenue
    • A tax rate of 100% will also result in zero government revenue
    • As the tax rate increases to above zero, there is an increase in the revenues of the government
    • As the tax rate continues to increase, the resultant increase in government revenue begins to slow
    • At a particular point the curve peaks and turns back towards the horizontal axis

The Laffer Curve is the reason that the federal government will collect more tax revenue this year despite the fact that President Trump lowered taxes. When taxes are raised, those with the money to hire good tax accountants find a way to avoid paying high taxes and tax revenues go down. Those of us without good tax accountants (usually the middle class) are stuck paying the increased taxes. The spending power of the middle class decreases, and the economy slows down. When the middle class has more money to spend, the economy does well.

Congratulations, Arthur Lapper. The recognition is well deserved.

The Facts vs The Talking Points

Remember when the Democrats said that the Trump tax cuts would blow a huge hole in the deficit because of the money that would not be collected. Those who believed the Democrats need to study the Laffer Curve. Although liberals keep saying it doesn’t work, the history of tax cuts proves it does.

Yesterday Investor’s Business Daily posted an editorial about the impact of President Trump’s Tax Cuts.

The editorial states:

The latest monthly budget report from the nonpartisan Congressional Budget Office finds that revenues from federal income taxes were $76 billion higher in the first half of this year, compared with the first half of 2017. That’s a 9% jump, even though the lower income tax withholding schedules went into effect in February.

The CBO says the gain “largely reflects increases in wages and salaries.”

For the fiscal year as a whole — which started last October — all federal revenues are up by $31 billion. That’s a 1.2% in increase over last year, the CBO says.

The Treasury Department, which issues a separate monthly report, says it expects federal revenues will continue to exceed last year’s for the rest of the 2018 fiscal year.

The editorial concludes:

As we have said many times in this space, the problem the country faces isn’t that taxes are too low, but that spending is too high. The CBO projects that even with the Trump tax cuts in place, taxes as a share of GDP will steadily rise over the next decade, and will be higher than the post-World War II average.

But bringing in more tax revenues doesn’t help if spending goes up even faster. And that has, unfortunately, been the case, as the GOP-controlled Congress has gone on a spending spree.

Look at it this way. Tax revenues are up by $31 billion so far this fiscal year compared with last year. But spending is up $115 billion.

In other words, the entire increase in the deficit so far this year has been due to spending hikes, not tax cuts.

There are too many Republicans in Congress who don’t understand why the American voters sent them there. The Democrats have always loved to spend other people’s money, but the Republicans were supposed to be the alternative to that. Unfortunately, many Republicans have failed the voters. The only way to fix Washington is to unelect every Congressman who votes for spending increases. Otherwise the spending will only get worse.

The Economic Impact Of Tax Cuts

First of all, let’s take a short walk down memory lane to a Washington Post article from November 20, 2017.

The article explains how the Democrats plan to use the tax cut plan in the 2018 mid-term elections:

The goal of the ads will be to hit two messages. The first is that the GOP changes to the tax code themselves would be enormously regressive, showering most of their benefits on the wealthy while giving crumbs to working- and middle-class Americans or even raising their taxes. The second is that these tax cuts would necessitate big cuts to the safety net later — the ad references $25 billion in Medicare cuts that could be triggered by the GOP plan’s deficit busting — further compounding the GOP agenda’s regressiveness down the line.

Geoff Garin, a pollster for the Democratic super PAC Priorities USA, tells me that his polling shows that this combination alienates working-class whites, particularly Obama-Trump voters. “They are fundamentally populist in their economic views, and they find big breaks to corporations and the wealthy especially heinous when the flip side of that means cutting Medicare and Medicaid,” Garin said.

That was the original plan. Now lets look at an article posted yesterday in The New York Post about the results of the tax cut plan.

The New York Post reports:

We are already starting to see a fiscal dividend from Trump’s pro-business tax, energy and regulatory policies. The Congressional Budget Office reports that tax revenues in April — which is by far the biggest month of the year for tax collections because of the April 15 filing deadline — totaled $515 billion. That was good for a robust 13 percent rise in receipts over last year. ‎

…But there’s another lesson, and it’s about how wrong the bean counters were in Congress who said this tax bill would “cost” the Treasury $1.5 trillion to $2 trillion in most revenues over the next decade. If the higher growth rate Trump has already accomplished remains in place, then the impact will be well over $3 trillion of more revenue and thus lower debt levels over the decade.

Putting people back to work is the best way to balance the budget. Period.

The article concludes:

No one thought that Trump could ramp up the growth rate to 3 percent or that his policies would boost federal revenues. But he is doing just that — which is why all that the Democrats and the media want to talk about these days is Russia and Stormy Daniels.

I want to go back to the original Democrat statements about the damage the tax cuts would do to the economy. Did they really believe that or do they simply want more of our money under their control? Either way, it doesn’t say good things about them–either they don’t understand economics (see the Laffer Curve) or they lied. Obviously they have to continue lying if they want to use the tax cuts as part of their mid-term election campaign–they have already stated that they want to rescind many of the tax breaks that have resulted in the recent economic growth.

If you are inclined to vote on pocketbook issues, the only choice in November is to vote for Republican candidates for Congress.

The Impact Of The Trump Tax Cuts

The Gateway Pundit is reporting today that corporate first quarter earnings are the best in twenty-five years.

The article reports:

We predicted that this would be one of the greatest quarters ever in the history of corporate earnings and we were right. 

We reported on April 12th that “because of President Trump’s economic measures, the ‘bottom line’ or net profits for these companies will be the best 1st Quarter results ever!”  We also said –

As a result of these tax cuts, most US Corporation will deliver a net income in their financial results that is 14% greater than prior year. This starts in the 1st Quarter of 2018 and the results for many major companies will begin being reported in the next few weeks.  This means that for every large corporation reporting financial results in the US, the net income after taxes will be increased by 14% – an unheard of increase!

With many companies reporting their best year’s results ever in 2017, and the economy on fire, and taxes being cut by 14% – expectations are that the net income for these companies in the 1st Quarter of 2018 will be the best ever and this will continue from this point forward!

The article quotes a Marketwatch report:

According to Thomson Reuters I/B/E/S, of the 343 companies, or about 70%, of S&P 500 members that have reported earnings to date, 79.9% have reported earnings per share that were above analysts’ expectations, putting the season on track for the highest earnings beat rate on record, going back to 1994.

So far, the first-quarter growth rate for EPS is 22%, compared with consensus earnings growth of 16.3% as of April 12, according to Lindsey Bell, investment strategist at CFRA. That outperformance is underpinned by some of the most highly valued companies, including JPMorgan Chase & Co. JPM, -0.50% Apple Inc. AAPL, -0.44% Facebook Inc. FB, -0.32% and Amazon.com Inc. AMZN, -0.36%

Bell said recent quarterly results have seen outperformance of about 3 to 4 percentage points better than analysts’ consensus estimates on average, compared with the 5.7 percentage points earnings are currently running ahead.

Bell said what’s really impressive is that expectations were already lofty and this quarter represented the first in which the bar was raised to factor in fiscal stimulus measures such as corporate tax cuts, which took effect in late 2017.

“It’s significant because we haven’t seen a change like this from the very beginning to (the) start of reporting season,” Bell said.

The Marketwatch article is focused on why the stock market has not yet responded positively to good news in corporate earnings, but it includes a lot of interesting information about the current state of the economy. The biggest financial challenge we face as a nation is our continued overspending. Until that is brought under control, we will not have a truly healthy economy. Tax revenues are up since the tax cuts (that always happens–see the Laffer Curve for further information), but spending has also increased. We are a nation that based on our income should be driving a Ford but has gone out and purchased a Rolls Royce. At some point there will be a reckoning, and it will not be fun. We need to elect people who will shrink government and cut spending. Raising our taxes will not help because it will slow economic growth and decrease revenue. Please consider this when you vote in current primary elections and when you vote in November.

Bad Decisions Based On Faulty Premises

There are still some legislators that believe raising taxes increases revenue. Up to a point it does, but only up to a point. At a certain level, increased taxes result in people finding creative ways to avoid those taxes.

Hot Air posted an article yesterday about a proposed tax increase in the Rhode Island 2019 budget. The proposal would levy an 80 percent wholesale tax on all vapor products and related equipment in the state. There was an attempt to include this tax in the Rhode Island 2018 budget, but the attempt failed.

The article reports:

The tax would effectively label electronic nicotine delivery systems as tobacco products, despite containing no actual tobacco. Vaping advocates argue the tax will harm overall public health in the state by cutting off former smokers’ access to vapor products. They also note the proposal will fail to boost state revenues due to diminished sales, coupled with consumers crossing into neighboring states to buy their vapor products.

Rhode Island is a relatively small state–you don’t have to drive too far to cross into another state. That is what people will probably do to avoid this tax.

The article lists the problems with the proposal:

First, these are not tobacco products. The state plans to tax them under the same category, despite the fact that there is no tobacco involved in the process. Further, the tax applies to the equipment used to “vape” the liquid nicotine. Compare that to the tax system applied to tobacco. Even the worst sin taxing states haven’t tried applying that sort of a penalty to buying a pipe.

Next, as noted above, the damage to the nascent vaping industry will be epic just as it was in Pennsylvania when they instituted a 40% tax. After the tax went into effect, more than one hundred new businesses shut down just in the greater Philadelphia region.

In terms of health, not only will this likely push people who managed to quit cigarettes by switching to vaping back to tobacco, but new vapers who have probably developed a habit may feel compelled to go try smoking cigarettes for the first time. Rather than allowing this new technology to continue to help people quit smoking, a tax such as this will likely lead to the opposite effect, creating a new generation of smokers who find it more economically practical to light up rather than vape.

And finally, in terms of raising revenue for the state, this scheme never works. Every time states push for a big new sin tax on tobacco it blows up in their face and that’s what going to happen to a vaping tax as well. In 2016, New York State actually lost a half billion dollars in tax revenue on tobacco rather than seeing an increase.

This is a picture of the Laffer Curve:

The Laffer Curve is simply a representation of how human nature responds to increased taxes. When taxes reach a certain point, people begin to look for ways to avoid them, and tax revenue goes down. That is exactly what will happen if the tax on vapor products and equipment in Rhode Island becomes law. People will make the trip to neighboring states rather than pay the increased tax. As an unintended consequence, the vaping industry in Rhode Island will be destroyed, and more people will make the trip to Foxwoods to buy cigarettes to avoid the cigarette tax.

The Laffer Curve At Work

Yesterday CNS News reported that during the month of January (the first month the Trump tax cuts were in effect), the federal government ran a surplus.

The article reports:

January was the first month under the new tax law that President Donald Trump signed in December.

During January, the Treasury collected approximately $361,038,000,000 in total tax revenues and spent a total of approximately $311,802,000,000 to run a surplus of approximately $49,236,000,000.

Despite the monthly surplus of $49,236,000,000, the federal government is still running a deficit of approximately $175,718,000,000 for fiscal year 2018. That is because the government entered the month with a deficit of approximately $224,955,000,000.

The article also reports some of the history:

Over the last twenty fiscal years, going back to 1999, the federal government has run surpluses in the month of January 13 times and deficits 7 times. Six of the Januaries in which the federal government ran deficits overlapped President Barack Obama’s time in office—including January 2009, the month Obama was inaugurated, and the Januaries in 2010, 2011, 2012, 2014 and 2016.

If you are not familiar with the Laffer Curve, it is a financial theory that the website the balance describes as follows:

The Laffer Curve is a theory that states lower tax rates boost economic growth. It underpins supply-side economicsReaganomics and the Tea Party’s economic policies. Economist Arthur Laffer developed it in 1979.

The Laffer Curve describes how changes in tax rates affect government revenues in two ways. One is immediate, which Laffer describes as “arithmetic.” Every dollar in tax cuts translates directly to one less dollar in government revenue. 

The other effect is longer-term, which Laffer describes as the “economic” effect. It works in the opposite direction. Lower tax rates put money into the hands of taxpayers, who then spend it. It creates more business activity to meet consumer demand. For this, companies hire more workers, who then spend their additional income. This boost to economic growth generates a larger tax base. It eventually replaces any revenue lost from the tax cut.

This is an illustration of how the Laffer Curve works:

As you can see, there is a point where taxes reach a high point and the amount of revenue generated from taxes goes down. That is not a coincidence–that is what tax attorneys get paid for. One of the reasons we need to make the tax code simpler is that we need to take away the complexities that allow people to hide income and avoid taxes. I believe that was one of the goals of the Trump tax plan. It remains to be seen whether or not that goal was achieved.

Preventing The Fleecing Of The Middle Class

The American tax code is a tribute to the effectiveness of lobbyists and big campaign donors. The loopholes in the code for people who make a lot of money are numerous. Even with loopholes in place, the rich pay a lot of taxes. As I have previously reported, The top 10 percent of income earners, those having an adjusted gross income over $138,031, pay about 70.6 percent of federal income taxes. About 1.7 million Americans, less than 1 percent of our population, pay 70.6 percent of federal income taxes. These numbers come from actual IRS data.

However, it seems that when it comes to eliminating loopholes, it’s always the middle class loopholes that go away.

Breitbart posted an article today about Congress‘ latest effort to take away a middle-class tax break. Because of a certain lack of faith in the future solvency of Social Security, many employers offer employees 401k retirement plans. Aside from allowing middle-class families to save for the future, these programs provide a place to put money so that it will not be taxed during the highest earning period of the employee. It will be taxed later at retirement when traditionally a person’s earnings are lower and generally taxed at a lower rate. Congress was evidently planning to alter the current system.

Breitbart reports:

“There will be NO change to your 401(k),” Trump tweeted. “This has always been a great and popular middle class tax break that works, and it stays!”

House Republicans were considering a plan to slash the amount of income American workers can save in tax-deferred retirement accounts. Currently, workers can put up to $18,000 a year into 401(k) accounts without paying taxes on that money until they retire and withdraw money from their savings. Proposals under discussion on Capitol Hill would set the cap lower, perhaps as low as $2,400. The effect would be a huge tax hike on middle class workers.

The plan to lower the cap on 401(k)’s would not have had an effect on long-term government deficits. Instead, it would have raised tax revenue now but lowered it in the future, since the retirement savings would already have been taxed. But taxing the savings would have had an impact on household budgets and may have discouraged workers from saving, increasing their future dependence on government benefits.

Let’s cut spending to ‘pay for’ tax cuts. Actually, if taxes are cut, economic growth should increase to a point where there is no loss of revenue. During the 1980’s, after President Reagan cut taxes, government revenue soared. Unfortunately, the Democrats who controlled Congress at the time greatly increased spending, so the government debt increased rather than decreased. Generally speaking, lowering taxes increases revenue–people are less inclined to look for tax shelters.

The Laffer Curve works:

Congress needs to keep this in mind while revising the tax code.

 

What Tax Reform Can Do

President Truman is quoted as saying, “It’s amazing what you can accomplish if you do not care who gets the credit.” He also said, “You can’t get rich in politics unless you’re a crook.” We are seeing the truth in both of those observations in the current tax debate.

This is a picture of America‘s Gross Domestic Product (GDP) in recent years from the balance:

You might remember that 2012 was the year the tax increases to pay for ObamaCare began. In 2013 the Capital Gains tax increased for high income earners, and the increase in the medicare payroll tax also began in 2013. Obviously raising taxes did not help the economy.

This is the laffer curve:

As you can see, there is a point where tax increases no longer generate revenue.

I am going to assume that Democrats are going to try to block President Trump’s tax reform. I think that is rather obvious. So the question becomes, “Do Democrats not understand economic principles and economic growth (e.g. the Laffer curve) or do they simply want to enslave the American worker?” At this point it is a valid question.

I can understand high-tax states not wanting to give up the benefit they reap in the current tax code. I can also understand all the lobbyists tearing their hair out because their special interest will no longer get a tax break, but at some point Congress needs to do what is best for the country and for the American people. Economic growth is struggling under the current tax burden. Every American who works is giving the government a higher percentage of what they earn than the Medieval surfs paid their lords. That is a scary thought. At the same time, many people who choose not to work are driving expensive cars and living better than the people who do work. The poverty in America that the government is now supporting currently owns a nice car, a big-screen television, an ipad, a smart phones, and central air conditioning. I am all for helping people in time of need, but I think we have lost our way.

Congress needs to pass President Trump’s tax plan. Every Congressman who does not support the plan needs to be voted out of office as soon as possible. Unless the American voters begin to hold their representatives accountable for what they do, the swamp will never get drained. The problem is in both political parties. It is time to take note of the people whose votes help America and the people whose votes hurt America.

 

The New York Times Posts A Favorable Opinion Article About Donald Trump

Wow. The opinion page of the New York Times today posted an article entitled, “Why This Economy Needs Donald Trump.” The article was written by David Malpass, a senior economic adviser to the Trump campaign.

Mr. Malpass explains:

There is no doubt who has the better plan. Our economy is growing at only 1.1 percent per year, a fraction of our average rate, and the Congressional Budget Office forecasts just 2 percent annual growth (in inflation-adjusted gross domestic product) for the next 10 years.

Yes, we went through a deep recession, but it ended in 2009. The recovery has been the weakest in decades, and the first that has actually pushed median incomes down. Business investment and profits are lower now than a year ago. Counterproductive federal policies squash small businesses with inane regulatory sprawl that affects hiring, taxes, credit and medical care.

The result is a stagnant economy that leaves out millions of Americans who would like to work and get ahead, and a devastating report card on the Obama White House.

To restart growth, Mr. Trump would immediately lower tax rates, including for middle-income voters, and simplify the tax code. Americans would be able to exempt average child-care expenses from taxes, and Mr. Trump’s administration would eliminate the death tax, which falls especially hard on some small businesses and farmers.

The article goes on to explain that simplifying the tax system while reducing corporate taxes and eliminating or capping many tax deductions would make us more competitive in the world market and create jobs in America. Mr. Malpass contrasts this with Hillary Clinton’s plan to raise taxes, creating an noncompetitive corporate tax rate and discouraging investment with higher estate and capital gains taxes. Obviously Mrs. Clinton is not familiar with the Laffer Curve. This is a picture of the Laffer Curve. What the curve illustrates is that there is a point of no return in raising taxes where increased taxes no longer result in increased revenue.LafferCurveMr. Malpass also points out that Donald Trump wants to halt the negative impact of federal regulations on business. These regulations represent a hidden tax that increases the cost of doing business so that the consumer is forced to pay higher prices for goods. Government overreach is expensive.

The article concludes:

Voters will have an opportunity to decide for or against a government that’s failing on health care, taxes, trade, cost control and regulation. One candidate wants higher tax rates. The other would lower them. One candidate thinks the economic recovery has been successful whereas the other thinks it left millions of Americans out. One candidate has spent her lifetime seeking the presidency. Mr. Trump hasn’t.

As Thomas Jefferson said, “A little rebellion now and then is a good thing, and as necessary in the political world as storms in the physical.” It’s time for one now.

Agreed.

The Laffer Curve Also Applies To Cigarette Taxes

Investor’s Business Daily posted an article today about the increased cigarette taxes in New York State.

The article reports:

The state of New York thought it would reap a bonanza after increasing taxes on cigarettes. But there was no bonanza. In fact, the tax take actually fell. New Yorkers, may we introduce Art Laffer?

Art Laffer is the creator of the Laffer Curve, seen below:

LafferCurveThe Laffer Curve illustrates the relationship between tax rates and revenue, showing that increasing tax rates will only increase revenue up to a point.

The article further reports:

The New York Post cites a National Academies of Sciences, Engineering and Medicine report that says the state’s losses are much bigger — some $1.3 billion in taxes aren’t collected each year, due to behavioral changes.

Of course, some of that loss might be considered favorable in that it represents people who simply quit rather than pay the higher levy. Indeed, estimates say that 19% of those who smoked have quit in the last decade.

Taxable sales, however, are down 54% in the same period. If the goal of the higher tax was just to get some smokers to quit, then mission accomplished. But if the goal was twofold — get smokers to quit and raise revenue — then it has failed.

But for many others who still smoke, the behavioral changes haven’t been as favorable. Some just pay up. But others simply buy black-market cigarettes, supplied mostly by organized crime. The Tax Foundation estimates that 58% of cigarettes in New York come from out of state. So roughly 6 in 10 cigarettes now are not taxed by New York.

The article also points out that the year after the tax increase imposed, a household earning less than $30,000 a year spent 23.6% on cigarettes, as opposed to 11.6% in 2004. A family earning over $60,000 a year, spent 2.2% on cigarettes. Seems a little uneven to me.

The article concludes:

So is it any surprise that the tax take is shrinking? No. This was in fact entirely foreseeable. But, of course, foreseeing it would have required New York voters and the politicians they put into office to actually learn something about economics.

Agreed.

How To Create Economic Growth

Yesterday Stephen Moore posted an article at the Wall Street Journal about what has happened in North Carolina since 2013.

The article reports:

Four years ago North Carolina’s unemployment rate was above 10% and the state still bore the effects of its battering in the recession. Many rural towns faced jobless rates of more than 20%. But in 2013 a combination of the biggest tax-rate reductions in the state’s history and a gutsy but controversial unemployment-insurance reform supercharged the state’s economy and has even helped finance budget surpluses.

As Wells Fargo ’s Economics Group recently put it: “North Carolina’s economy has shifted into high gear. Hiring has picked up across nearly every industry.”

The tax cut slashed the state’s top personal income-tax rate to 5.75%, near the regional average, from 7.75%, which had been the highest in the South. The corporate tax rate was cut to 5% from 6.9%. The estate tax was eliminated.

So what happened next? Did the state go bankrupt? Is everyone in the state walking around in rags wondering where their next meal is coming from? Not hardly. On May 6, Gov. McCrory announced that the state has a budget surplus of $400 million.

The article explains:

This is the opposite of what has happened in Kansas, where jobs have been created but revenues have fallen since the top personal income-tax rate was cut from 6.45% in 2012 to 4.6% today and the income tax for small business owners who file as individuals has been eliminated. North Carolina’s former budget director, Art Pope, says one difference between the two states is that “we cut spending too. Kansas didn’t.”

…You won’t hear much about this in national news media, where the preferred story line is that tax cuts don’t work because they were followed by budget deficits in Kansas. In North Carolina, policies to reduce taxes and stop paying people for not working have created jobs and surpluses. Mr. Pope says: “I wish people criticizing Kansas would look at what’s happened here.”

Unfortunately the State of North Carolina has not cut spending as much as some of us would like to see it cut, but we have made progress in the right direction.

For any of you who are still skeptical, this is a picture of the Laffer Curve:

Higher Revenues with Lower Taxes? The Laffer Curve Explained

The bottom line here is very simple–after a certain point, raising taxes is counter productive and will not produce revenue. The best way to increase revenue is to decrease taxes, which stimulates economic activity. As economic activity increases, tax revenue generated as a result of that activity increases. North Carolina has learned that lesson. However, it also helps to reduce government spending–every dollar spent by the government is a dollar taken out of the private sector.

Proof The Laffer Curve Works

On Wednesday, CBN News reported that France was ending its super tax on millionaires.

The article reports:

Socialist President Francois Hollande proposed a tax of up to 75 percent on people earning above 1 million euros a year, equal to about $1.2 million a year in the United States

One critic of the super-tax said it makes France “Cuba without the sun.”

Many wealthy French citizens fled the country to avoid paying the super tax, including actor Gerard Depardieu, who became a Russian citizen. 

Because millionaires left the country or found tax shelters, the excessive tax did not generate nearly the amount of money that politicians predicted it would.

What is at play here is the Laffer Curve.

On April 15, 2012, Forbes Magazine posted a graph of the Laffer Curve:

Contrary to what you may have heard, people are not stupid. If it becomes obvious that the harder they work the more will be taken from them, they will not work as hard. There is a point where excessive taxation does not reap positive rewards. Congress  needs to remember this. It didn’t work in France, and it won’t work in America.

With Friends Like These…

The friendship between President Obama and Warren Buffett is not news. Warren Buffett supported President Obama’s tax increase proposals saying that his secretary paid higher taxes than he did. The failure of the Obama Administration to permit the Keystone Pipeline to be built allows the Burlington Northern Santa Fe railroad, owned by Berkshire Hathaway, owned by Warren Buffett, to transport the oil (see rightwinggranny.com) from the oil fields to other areas of the United States.

Well, President Obama has often stated that companies that move their headquarters overseas are unpatriotic. He has stated that it is patriotic to stay in America and pay higher taxes. I guess Warren Buffett does not let President Obama’s opinion interfere with his business decisions.

Today’s Washington Post is reporting that Burger King is buying Canadian chain Tim Hortons Inc.. CNBC is reporting today that Berkshire Hathaway (Warren Buffett) is helping to fund the deal by committing $3 billion of preferred equity financing. Berkshire Hathaway will not play a role in the management, it is only providing the financing.

So why is this ironic? This acquisition will allow Burger King to move its headquarters to Canada where the corporate tax rate is 26.3 percent as opposed to America where the corporate tax rate is 39.1 percent.

It is not unpatriotic to want to save money. Burger King is accountable to its stockholders for its finances. It is not illegal for the company to move its headquarters to Canada to avoid an unreasonable tax burden. The solution to the exodus of corporations from America would be for Congress to lower the corporate tax rate. The Laffer Curve illustrates that this would create income for the government–not reduce income.

An Explanation I Can Understand

IJReview has posted this in the past, but I thought it was worth sharing again.

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this…

The first four men (the poorest) would pay nothing The fifth would pay $1 The sixth would pay $3 The seventh would pay $7 The eighth would pay $12 The ninth would pay $18 The tenth man (the richest) would pay $59

So, that’s what they decided to do.

The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve ball. “Since you are all such good customers,” he said, “I’m going to reduce the cost of your daily beer by $20″. Drinks for the ten men would now cost just $80.

The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still drink for free. But what about the other six men ? How could they divide the $20 windfall so that everyone would get his fair share?

They realized that $20 divided by six is $3.33. But if they subtracted that from everybody’s share, then the fifth man and the sixth man would each end up being paid to drink his beer.

So, the bar owner suggested that it would be fair to reduce each man’s bill by a higher percentage the poorer he was, to follow the principle of the tax system they had been using, and he proceeded to work out the amounts he suggested that each should now pay.

And so the fifth man, like the first four, now paid nothing (100% saving). The sixth now paid $2 instead of $3 (33% saving). The seventh now paid $5 instead of $7 (28% saving). The eighth now paid $9 instead of $12 (25% saving). The ninth now paid $14 instead of $18 (22% saving). The tenth now paid $49 instead of $59 (16% saving).

Each of the six was better off than before. And the first four continued to drink for free. But, once outside the bar, the men began to compare their savings.

“I only got a dollar out of the $20 saving,” declared the sixth man. He pointed to the tenth man,”but he got $10!”

“Yeah, that’s right,” exclaimed the fifth man. “I only saved a dollar too. It’s unfair that he got ten times more benefit than me!” “That’s true!” shouted the seventh man. “Why should he get $10 back, when I got only $2? The wealthy get all the breaks!”

“Wait a minute,” yelled the first four men in unison, “we didn’t get anything at all. This new tax system exploits the poor!”

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn’t show up for drinks so the nine sat down and had their beers without him. But when it came time to pay the bill, they discovered something important. They didn’t have enough money between all of them for even half of the bill!

And that, boys and girls, journalists and government ministers, is how our tax system works. The people who already pay the highest taxes will naturally get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas, where the atmosphere is somewhat friendlier.

David R. Kamerschen, Ph.D.  –   Professor of Economics.

The same general principle is explained in the Laffer Curve.

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