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'America First' triumphs in Davos

Lawrence Kudlow on

And now, a roaring stock market, which has generated $7 trillion in new wealth, provides the only realistic chance of bailing out excessive government-union pensions and benefits -- even though these very unions totally opposed Trump's corporate tax reform.

Ankle-biting Democrats say that rising business profits will go to shareholder buybacks. As if that were a bad thing. Meanwhile, new money is circulating throughout the economy to start new companies and re-oxygenate the system.

Didn't Apple just announce $350 billion in new investment projects?

Democrats say the incredible business response to tax reform is nothing more than one-time crumbs for workers. But didn't Walmart -- which has bitterly fought attempts to raise the federal minimum wage -- just raise its starting minimum wage for virtually all its wage earners, announce a one-time bonus of up to $1,000 for eligible employees, expand maternity and parental leave benefits, and commit as much as $5,000 to every employee who adopts a child?

That's permanent, as are companies' increased contributions to retirement funds.

The post-tax- and regulatory-reform policies of the Trump administration have barely been put in place, yet they're already benefiting working folks around the country. These are people who have barely had a raise in 20 years.

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Trump's critics belittled the idea that corporate tax cuts could actually increase wages. But in faster than a New York minute, several million wage earners have already benefitted.

Then there are the know-it-all critics who say there's no academic evidence to support the view that business taxes matter for the workforce.

Yet peer-reviewed papers -- from respected economists Alan Auerbach, Laurence Kotlikoff and the Romer family -- conclude that higher after-tax returns to capital generate investment. I've been saying this for a long time. With more capital behind each worker, there's greater productivity. And new investment projects raise the demand for workers and their wages.

And don't forget the president's argument about the importance of regulatory reduction. "Regulation is stealth taxation," Trump said in Davos. "We are freeing our businesses and workers so they can thrive and flourish as never before." The Trump tax bill ended the Obamacare individual mandate and opened the door to energy drilling in the Arctic National Wildlife Refuge.

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