As the midterms approach, President Obama has re-entered politics to accuse Republicans of serving as handmaidens of Wall Street, corporations and the rich with their Tax Cuts and Jobs Act of 2017. Obama complained in two recent speeches that he has not received adequate recognition for his contribution to the soaring economy, for which he claims credit. This is Obama’s fantasy land, because he has a total misunderstanding of basic economics.
Over the past three years, we have emphasized that corporate and business taxes are borne most heavily — 70-90 cents of every dollar — not by businesses and Wall Street but by workers in lower wages and fewer jobs. That is why this tax reform has led to an explosion of jobs and increased wages for average workers. Obama and the Democrats in Congress will not acknowledge this reality because it does not jive with their rhetoric, which trends more toward socialism every day.
Obama’s economic “recovery” was no recovery at all, but the worst response to a recession since the Great Depression — precisely because he pursued just the opposite of the pro-growth policies of Presidents Kennedy and Reagan that are embedded in the 2017 Republican tax reform. Deficits under Obama soared, doubling the national debt, because of his near-zero economic growth, business-crushing regulation, tax rate increases and rampant expansion of federal benefit programs with relaxed work requirements.
Obama reopened his assault on President Trump and congressional Republicans with a claim that tax cuts increase the deficit but that Republicans really don’t care about deficits and national debt. This, from the king of deficits and debt, under whom the United States had record-shattering deficits of over $1 trillion four years in a row.
The Congressional Budget Office (CBO) originally estimated the GOP tax reform, as passed, would lose $1.456 trillion in revenue over 10 years. But as Larry Kudlow, President Trump’s chairman of the White House National Economic Council, reported on CBS’s “Face the Nation” last month, “Even the [latest] CBO numbers show now that the entire $1.5 trillion is virtually paid for by higher revenues and better nominal GDP.”
Many people have trouble understanding the relationship between tax policy and the economy, and the economy’s effect on tax revenues resulting from differing tax policies. Some of…
