A new Fox News poll found that voters, by a 20 percent margin, reject raising taxes to support a bigger government welfare state.
Only 36 percent said they would rather pay higher taxes to help fund a larger government that provides more services, while 56 percent said they would prefer a smaller government that provides fewer services.
Nearly 80 percent of respondents listed the economy as their top issue of concern.
Other financial concerns included the federal deficit at 65 percent, the amount paid in taxes at 63 percent, and being able to pay one’s bills at 58 percent.
The poll was conducted between April 18 and April 21 among a random sample of 1,002 registered voters with a margin of error of +/- 3 percentage points.
President Joe Biden has proposed hiking the corporate tax rate from 21 to 28 percent and reportedly would like to raise the capital gains tax on wealthy Americans to over 40 percent when combined with the Obamacare surcharge tax.
The non-partisan Tax Foundation determined that the combined corporate tax rate — federal and state — under Biden’s plan would be 32.34 percent, the highest of all the nations in the Organization for Economic Co-operation and Development.
The Wall Street Journal reported that Biden would also increase the top capital gains tax from 23.8 percent to 43.4 percent.
The capital gains tax is on investments, so Biden’s policy would disincentivize what allows businesses to grow and create jobs.
Raising corporate income taxes would put the U.S. at a competitive disadvantage, whether one looks at statutory tax rates or effective corporate tax rates.https://t.co/tGSlb7eUw5
— Tax Foundation (@TaxFoundation) April 27, 2021
States also tax capital gains, meaning several of them, including California, New York and New Jersey, would have a combined rate of over 50 percent.
Under President Biden’s tax plan, 13 states and D.C. would have a top combined capital gains tax rate at or above 50%:
(57.3% Portland, OR) pic.twitter.com/GfWgBZhlbs
— Tax Foundation (@TaxFoundation) April 23, 2021
Lawrence Lindsey — a former Federal Reserve governor and director of the National Economic Council during former President George W. Bush’s first term– argued in an April 25 commentary for The Journal that Biden’s capital gains tax increase would punish the rich for punishment’s sake since it would actually lower the overall revenues in federal coffers.
The economist explained that there is an optimum rate to tax investment income to maximize revenue. Going beyond that rate becomes such a disincentive to invest that it means less activity and thereby less revenue to the Treasury.
Lindsey wrote that “43.4% is well above the rate that would generate the most revenue for the government.
“Congress’s Joint Committee on Taxation … puts the revenue-maximizing rate at 28%. My work several decades ago puts it about 10 points lower than that. That means President Biden is willing to accept lower revenue as the price of higher tax rates.”
This idea is represented by the Laffer Curve, named for economist Art Laffer, who advised both Ronald Reagan and Donald Trump.
Reagan’s time in office proved the Laffer Curve true, with revenues to the Treasury nearly doubling during the 1980s following major tax cuts.
His election in 1980 really was a direct response to the high taxes and big government policies of the 1960s, as typified by the so-called Great Society under Democrat Lyndon B. Johnson.
Biden seems intent on returning to those “good ol’ days.”
Unemployment climbed to 7.5 percent by the time Reagan took office in January 1981. It would top out at over 10 percent in the early years of his presidency before his economic policies took effect.
By 1983, following across-the-board tax cuts, the economy began to boom. Three and a half million new jobs were created that year, followed by 3.9 million in 1984.
Over 18 million jobs were created in all during Reagan’s presidency.
Compare that to President Barack Obama’s time in office, when just 11.6 million jobs were created even though there were approximately 80 million more people living in the country.
CNN reported that Obama oversaw the slowest economic recovery since World War II after raising taxes and enhancing the welfare state.
The Americans polled by Fox News are right: Lower taxes and less government is the way to go.
This article appeared originally on Patriot Project.
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