So let me get this right. After every Democrat in the House of Representatives and Senate voted against One, Big, Beautiful Bill — and therefore promoted a roughly $5 trillion tax increase — a few presidential wannabes, like Senators Cory Booker and Chris Van Hollen, are now surfacing plans that would end most income taxes on middle-class Americans, according to a Wall Street Journal news report. The two men have slightly different plans, but basically, as I understand it, they would increase the standard deduction and some other credits so that the first $75,000 of income would not be taxable.
Could Democrats be rediscovering tax cuts? Is the ghost of John F. Kennedy, who was the last Democratic president to cut tax rates and usher in supply-side economics, suddenly the Kennedy ghost above their shoulder? Do they admit that President Trump was right when he hit them over the head in 2024 with across-the-board tax cuts, no tax on tips or overtime, big benefits for seniors, and so on.
Now I don’t agree with the details of the Democratic plan, we’ll talk about it in a moment. But even the slightest indication that Democrats believe that lower taxes, at least for some people, are better than higher taxes for everyone could be a good thing. Just maybe.
What Booker and Van Hollen are doing now is essentially increasing the standard deduction for middle-class people, somewhere between $75,000 and $100,000 per year. I’m oversimplifying it, but that’s the gist. The problem is that they want to significantly increase taxes on successful earners, the higher end earners.
Sen. John Barrasso, R-Wyo., discusses Democrats’ efforts to block DHS funding for ‘Kudlow.’
According to the Journal article, Mr. Van Hollen is calling for an additional tax that could be as much as 12 percent above existing taxes, which would bring the top rate to almost 50 percent, or if you live in New York or California you would be taxed in the mid-1960s. Mr Booker would increase the top rates from 35 percent and 37 percent to a new bracket of 41 percent and 43 percent.
Confiscating tax rates like these would suppress work and investment, leading to a depressed economy, higher unemployment, and even larger budget deficits for that matter. I don’t care how many people the senators want to protect from income taxes, reversing punitive tax rates on successful entrepreneurs and wealthy individuals is a non-starter.
Supply-side economics, as Kennedy or Art Laffer would tell you, suggests that if you tax a little more, you get less of it. If you punish success and prosperity, you will have less success and prosperity. But if you tax a little less, you stimulate work effort and risk-taking. And that is the ticket to prosperity.
As Kennedy often said, a rising tide will lift all boats. There is no need to punish some and reward others in some bizarre socialist redistribution plan that has been tried many times before and has always failed. But you know what people? There are at least a few Democratic senators who don’t think tax cuts are dirty words. Is JFK making a comeback?
