I'd Vote for It. You Should, Too
What's more, faster economic growth will generate much higher tax revenues. From businesses to investors to entrepreneurial startups, less tax avoidance and sheltering will raise revenues far beyond the standard consensus estimate.
Supply-siders like myself always buck the trend on pricing out lower tax rates. But again, we were right in the '60s, '80s and '90s running against the tide. So I suggest history will repeat itself.
By the way, in terms of the revenue hunt going on in Congress, I wish somebody would look at the lowball estimates compiled by the JTC with respect to repatriation. It estimates $25 billion in 2018, $21 billion in 2019, and $6 billion to $7 billion in the three years following. This is nuts.
Assuming about $3 trillion coming back home at an average tax rate of 10 percent, that's $300 billion in new revenues -- way beyond the JTC estimate. And that's conservative. It could be $350 billion in the first year or two, which would be substantially more revenue and a way bigger pay-for than what the JTC predicts.
And there's more on the dynamic side. Booming stock market gains of roughly $6 trillion as of late could generate another $600 or $700 billion in revenues from capital gains, as well as hundreds of billions of dollars more in dividends, which generate massive revenue increases.
None of this is scored. The government forecasters don't understand international flows and the interactions of stocks, capital gains and dividends. Their estimates are probably several trillion revenue dollars short.
Sure, there are things on the individual side that should be changed. Personal tax rates should be much lower. A backdoor capital-gains tax hike on individual investors must be erased. And the proliferation of tax credits is inefficient and complex with no marginal incentives to promote growth.
Yes, everybody likes kids. But not everyone has them. And a lot of people like dogs and cats. Shouldn't they get tax credits, too? No. If you're looking for more money in your pocket, more take-home pay, the best prescription is to slash personal tax rates for everyone.
(By the way, why didn't Congress end the carried-interest loophole for private-equity firms?)
But here's the crux of the matter: An investment boom generating much faster growth will benefit everyone. Small businesses, new businesses, investors and wage earners will all prosper from a tax-cut-led investment boom.
Yes, a rising tide will lift all boats. The great news is that President Trump, the Senate and the House are absolutely moving in the right direction -- and gathering momentum on the way.
I'd vote for it. You should, too.
To find out more about Lawrence Kudlow and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate webpage at www.creators.com.Copyright 2017 Creators Syndicate Inc.