Conservatives should not worry about the tax cutting direction of a second term of President Donald J. Trump, because he is committed to cutting taxes, regulations and the size of government. There are some who are pushing Trump to abandon traditional supply side policies, but he made clear this past week that he is fully committed to that philosophy.
During his acceptance speech at the Republican National Convention, Trump returned to the central theme of his plan to grow the American economy – tax cuts. "I gave the biggest tax cut in history, bigger than the Reagan Tax Cuts, but I am going to lower taxes still further,” Trump boomed from the podium.
Trump’s declaration should end the debate in conservative circles about whether the Republican Party is going to break with the Reaganomics, which Henry Olsen of the Ethics and Public Policy Center derided as “old guard, 1980s, non-rethought free market fundamentalism” that is “dead as a politically successful movement.” This is wishful thinking. Free markets are the reason why the American economy and standard of living is far superior to our friends in Europe and Asia.
The day prior to Trump’s speech, Oren Cass of the American Compass, the leading voice for the post-Liberal Right, lauded Sen. J.D. Vance’s vice presidential acceptance speech because it was “unlike anything heard from the podium of the Republican National Convention in a generation – no mention of tax cuts, shrinking government, of ‘job creators’”. Although I agree that Sen. Vance was a great pick to be Trump’s Vice-Presidential nominee, I disagree with Cass that a lack of mention of tax cuts was a signal to Republicans that he wants tax hikes. Sen. Vance was introducing himself to many Americans who are unfamiliar with this work in the Senate; not mapping out a Trump-Vance tax agenda. Again, it is wishful thinking by some that Republicans will abandon small government, low tax policies for a Democrat-lite agenda.
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But in his speech from the podium, Donald Trump not only called for cutting taxes and combatting government waste, he also channeled the late supply-sider Rep. Jack Kemp when he said: “Now, people don’t realize, I brought taxes way down, way, way down. And yet we took in more revenues the following year than we did when the tax rate was much higher. Most people said, how did you do that? Because it was incentive.”
Contrary to Teamster President Robert O’Brien, who bashed corporations in his convention speech, Trump praised corporations such as Apple for bringing “billions of dollars into our country” after the 2017 tax cuts. Trump was wrong on one point: $1.6 trillion dollars came back to America because of his corporate tax cut.
The economic history encompassing the Kennedy and Reagan across-the-board tax rate reductions, the Clinton-Gingrich capital gains tax cut, the George W. Bush personal and investment tax cuts, and the corporate tax cut during Trump’s first term unequivocally demonstrates that tax reductions catalyze economic growth and augment revenue streams.
Most recently, Trump's tax cuts profoundly transformed the economic landscape for working-class Americans, enabling a typical married couple with two children to realize savings of $2,917. Additionally, the tax cuts led to pay raises, bonuses, or increased retirement contributions for 6 million workers, nearly 200 companies announcing wage increases, and substantial domestic investments.
In his speech, Trump asserted: “You’re paying too much; we’re going to reduce your taxes still further. We gave you the biggest one, as I said. We’re going to give you more and it’s going to lead to tremendous growth. We want growth in our country. That’s what’s going to pay off our debt.” Trump plans to extend the 2017 tax cuts and is considering cutting the corporate tax from 21 percent to as low as 15 percent, which leads to more investment, more jobs, higher productivity and higher wages.
Cutting taxes, regulations and national debt sounds a lot like an “old guard, 1980s” conservative economics, which is a proven formula for increasing growth, jobs, and wages for all Americans. It’s time for all conservatives to get on board with the MAGA Supply-sider Donald Trump.
Cesar Conda, a former Chief of Staff to Sen. Marco Rubio and former Assistant for Domestic Policy to Vice President Cheney, serves on the Economic Policy Board of the Committee to Unleash Prosperity.
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