Let’s take a break from the war and continue an important economic story, and that is the continued mobility of the great American middle class. There is much more prosperity here than the left-wing populist tax-and-spend Democrats would have anyone believe.
Scott Winship of the American Enterprise Institute has released a new study showing how the core middle class and lower incomes have shrunk, following a boom in the upper middle class. Dual-income households have nearly tripled since 1979, from 10 percent to 31 percent, to $326,000 a year. The so-called core middle class, at just over $100,000, actually fell only slightly from 35 percent to 31 percent. Incomes have fallen slightly in the lower middle class and poorer groups. I’m going to label this and simplify this nearly 50-year period of middle-class prosperity as the era of relatively low supply-side tax rates. Booked by President Reagan and President Trump.
Household incomes have increased across the spectrum, especially among women. And other studies show that individual mobility to the top fifth of earners and people from the bottom fifth has also increased by about 50 percent. In other words, a rising tide lifts all boats.
National Economic Council Director Kevin Hassett praised President Donald Trump’s State of the Union address on “Kudlow.”
Democrats love to portray supply-side economics as trickle-down. Or hollowing out the middle class, but the data shows this isn’t true. Furthermore, as my friend Steve Moore writes, Trump 2.0’s tax cuts are uniquely designed to help the middle class with tax-free tips, overtime, and Social Security. Add to that the Trump bills that help newborns own a piece of the rock and amass wealth, no matter who they are or where they come from or what skin color they are.
Trump’s 1.0 tax cuts during his first term disproportionately benefited middle-class workers, due to the positive impact of lower business taxes. The same goes for Trump 2.0, with its 100 percent direct cost reimbursement and its two-way fair trade channeling a factory building boom that will be a huge shock to working people.
Meanwhile, the top 1 percent of income earners pay more than 40 percent of the tax burden, and when you add in the state and local taxes of the big blue states like New York, California and lately Washington State, the most successful earners will pay half or more of the tax burden. Americans know they are overloaded. And they also know that more and more of that money is being spent fraudulently in the same big blue states that tax too much in the first place. The Republican Party can beat history and win the midterm elections if they just get out there and do the selling.
