FOX Business host Larry Kudlow says Americans remember having a lot of fun with “Kudlow” during the Trump administration.
Can’t wait for Trump tax cuts 2.0, that’s the subject of the riff. During the years of President Trump’s first term, average real weekly wages (also known as take-home pay) rose more than 9%.
Take-home pay has declined by 3.6% over the Biden administration’s entire term so far.
Another statistic: Median household income during the Trump administration increased by $7,700 pre-pandemic, after adjusting for inflation. Median income rose by only $1,000 during Joe Biden’s term. These two numbers, take-home pay and median income, have a lot to do with Trump’s landslide election victory.
These are issues on the table for Mr. Trump’s working-class majority, which spans all races and has made significant inroads into the Democratic Party’s old coalition.
The economy ranked first in every opinion poll. Color plays no role when working people are broke and can’t afford gas, groceries, electricity, new cars, or new homes. It’s about the economy, and enough people remember how good the economy was during the Trump era and how bad it was during the Biden-Harris era.
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Sen. Rand Paul (R-Ky.) discusses President-elect Donald Trump’s plan to stop federal waste on Kudlow.
My point here is that the sooner President-elect Trump gets back to the blue-collar boom, the stronger his political position will be in Congress and across the country. That’s why I’m concerned that the new administration won’t start its legislative agenda with tax cuts.
I have heard that there are two reconciliation bills. Energy, defense, and the first take on the border. The second would reauthorize tax cuts that are set to expire later this year. Just as I don’t think Trump’s labor coalition should wait for tax cuts, I don’t think we should wait for tax cuts either. They want higher take-home pay and lower inflation.
I’m all for whatever it takes to produce 3 million more barrels of oil a day and bring gasoline down to $2 a gallon.
I’m all for building a wall to close the border, and if we’re going to move from Biden’s appeasement policy to a Trump-style peace policy through force, we need a stronger, more efficient Pentagon. I will need it, but I will leave the tax. From an economic or political perspective, I don’t think it’s a good idea to make cuts in the future.
Why not just create a large-scale reconciliation bill? This was until recently promoted by House Majority Leader Steve Scalise and others. Pushing the boundaries of fiscal policy to include all the areas we have previously discussed.
Remember Scott Bessent’s 3-3-3 system for Treasury Secretary? Growth of more than 3%. Reduce the deficit to less than 3% of GDP and add 3 million barrels per day. it’s okay.
The tax cuts would go a long way in boosting growth above 3% and reigniting the blue-collar boom, and would significantly reduce the cost of the bill, according to Sen. Mike Crapo, who is expected to lead the Senate Finance Committee next year. People should listen to what he says. It will be evaluated against current policy, which assumes that President Trump’s popular tax cuts will be extended permanently. ”
Mike Crapo says on this show that in terms of the scoring protocol by the Congressional Budget Office, if you keep spending forever and it increases every year, no one scores it as a bigger deficit, but for some reason they score it as a bigger deficit. If they allow it, the tax cuts will last forever, so they want to score it as a huge deficit increase, but they want to score it as a static score of $4 trillion in tax increases.
That’s nonsense. If continued spending is the current policy, then continued tax cuts should be the current policy. Here’s what Senator Crapo told me a few weeks ago:
Sen. Mike Crapo: And let me tell you something else that’s interesting, Larry: Under the spending protocols and scoring protocols that we use, current spending growth doesn’t score as a deficit; Extensions of current taxes (tax cuts) will be scored as a deficit.
By the way, Trump’s Tax Cut 1.0 from the Tax Cuts and Jobs Act of 2017 brought in a huge amount of revenue.
In a report last summer, economist Larry Lindsay found that the corporate tax cut alone generated more than 30% more revenue for taxpayers than the CBO originally projected in 2016, the year before the Trump tax cuts were passed. He pointed out that the top 1% continues to receive tax cuts. The share of the burden paid by the public is increasing and currently stands at nearly 46%. This is a good reason to reduce these personal tax rates as much as possible.
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Additionally, remember the importance of the 1099 small business tax deduction, and that small business people with LLCs pay personal income tax rates. Steve Forbes is right. Reducing capital gains taxes will not only encourage economic investment, productivity and growth, but will also, as always, generate huge revenues.
The sooner Trump 2.0 tax cuts move through Congress, the happier the working class who voted for Trump will be, and the sooner the blue-collar boom will reignite. That’s the riff.
This article is an excerpt from Larry Kudlow’s opening commentary in the December 3, 2024 edition of “Kudlow.”
