Kudlow warns Americans: We've never had anything like this in history

hello everyone welcome back to kudlow i'm larry kudlow great to be with you two big stories in today's wall street journal what wall street is telling us about the u.s economic outlook that's one and the west looks past covet 19 and sees economic resurgence that's another now i thought the first story i mean they're both important stories don't get me wrong but i thought the first story was a little soft um yes it credited government stimulus and vaccines for the booming economy i don't know the stimulus is so short-lived it did know how pre-pandemic we were producing strong gains for low-skilled workers that's good but of course that was president trump's doing and they never give him any credit always failed to mention uh trump now the reason i was soft on the story is it didn't mention the huge threat of president joe biden's tax hikes and the growing fact that joe biden is waging war on investment and if these tax hikes pass congress it's going to greatly damage the middle class and throw a wet blanket over the entire economic boom which they had mentioned all that now the second story on the west looking past the pandemic and seeing economic revival that's good it create it correctly focused on the vaccination issue now the story also failed to mention trump in fact it was his operation war of speed that led to the boom in vaccinations a vaccination boom is reopening the economy and generating a prosperity boom but it's useful information the united kingdom our british cousins look pretty good on this and uh also unfortunately the european union botched the vaccine so their recovery is lagging behind in each case the vaccine is crucial by the way india and brazil two great countries they're not doing great either they have not done well on the vaccine but i will say when you toss in china and most of south asia including australia it still looks like a worldwide global boom and that is a very good thing now here back at home i think today's consensus estimate for first quarter u.s gdp is about six and a half percent that number is going to be printed sometime later this week the atlanta fed's gdp now predicting 8.2 percent i'm even going to take the over on that the number could be 10 could be even higher anyway today's report on business capital spending which is one of the most important indicators showed surging core capex orders rising 11.6 percent year on year shipments up 10.4 percent that shows you we're marching towards more investment better productivity and higher real wages that is if we don't tax it all to death now we've already seen booming consumers spending booming housing booming autos and inventories are still rock bottom and they're going to be rebuilt and as they do surge in the future months the gdp is going to stay very very high employment is also going to rise and i dare say it again with all this boom stuff and all these positive stories if it ain't broke don't fix it right wrong president biden wants to fix it but it's a fix that nobody wants except his progressive left ivy logs he is launching an assault on investment that threw his huge tax hikes on business and capital gains so we invoke arthur laffer tax something more and you're going to get less of it tax investment more you're going to get less investment the wall street journal's lead headline today quote the dumbest tax increase is exactly right taking the core cap gains tax rate from 20 to 40 percent is sheer falling and of course the 3.8 obamacare investment surcharge remains so you're really at 43.4 europe get this europe averages eighteen percent thirty three point four is higher than eighteen and wait a minute bernie sanders beloved sweden is at thirty percent so thirty percent is even lower than 43.4 that's sweden now remember the cap gains tax is a second tax on corporate income and hence the integrated rate would be about 56 with a 28 corporate tax rate that is unbelievable unbelievable and you add in state capital gains well you're going to get many cases above 60 this is insanity it's an assault on investment which means importantly an assault on the blue collar middle class wages 70 percent of the business tax burden falls on the middle class it's not about 400 dollars a year it's about the middle class tax burden from these big corporate taxes which includes cap gains now here's how the biden white house tried to sell their way out of this plan today listen to nec director brian deese we believe that it's not only fair but it would also help to reduce the kinds of tax avoidance that significantly under under undermines trust and fairness in the tax code itself yeah these are very poor and i dare say simplistic arguments here's one the reason tax avoid might be lowered is because nobody's going to sell their stocks or their businesses or other investments that's why it's not a good thing because the cap gains rate would be so high it provides a stale economy it generates economic sclerosis a healthy economy recapitalizes itself as people continuously invest sell and then reinvest again that re-oxygenates the economy shrimp tyrion style gas of creative destruction the new replaced the old capital is highly mobile and it represents the bloodstream of the economy and of course it was my hero john f kennedy who once said and i quote the tax on capital gains directly affects investment decisions the mobility and the flow of risk capital the ease or difficulty experienced by new ventures in obtaining capital and thereby the strength and potential for growth in the economy kennedy was a great economist by the way as i've said before he slashed tax rates as a democrat right now mr diese refers to ronald reagan's tax reform in 1986 and it is quite true the capital gains tax rate was the same as the top personal income tax rate he's right but you know what you know what that rate was 28 not 43.4 but 28 by the way reagan's reform left us with two brackets on personal income all right 28 and 15 now if mr diese wants to go back to that count me as the biggest supporter but i don't think that's where team biden is going now take a look at the history of capital gains and you'll see how off the chart the bidens are take a look at this the maximum rate hits 40 percent in the 1970s the bad 1970s then thanks to the steiger none amendment all right mr steiger was a republican from wisconsin mr nunn was a democrat uh from georgia thanks to passing that over jimmy carter's objections the capital gains tax went down to 28 from 40 to 28 now ronald reagan pushed it to 20 in his first tax cut package and then it did bounce back to 28 uh in the second tax reform package then don't forget democrat bill clinton brought the capital gains tax down to 20 he advertised it in his 96 campaign and he implemented it in early 97. and george w bush brought it down to 15 okay now look what's happened on the right side of the chart just focus please on the right side you'll see how bad this is barack obama moves the rate from 15 to 23.8 percent and now mr biden proposes going to nearly 45. call it 44 just look at that for a second hold that chart look at that it is literally off the charts it is a historical so mr biden would make new history here but it's a very bad history and one more point on all this larry lindsay is right he says in today's paper that part of the stupidity of the huge capital gains hike is actually that's going to lose money for the government it will lose revenues the joint tax committee estimates that 28 is actually the revenue maximizing rate not 44. many economists including myself think it's actually lower than 20 percent meanwhile the tax foundation estimates it will lose 130 billion dollars in revenues all right so this is a phony all this is nothing more than a confiscatory tax as my friend larry lindsey correctly writes so what it's part of the class warfare ideology it's part of the movement to punish success and punish growth the crazy progressive left obsesses with phony climate warning existential threats but they've never cared about growth or jobs or prosperity there is no existential threat their income redistribution and income levelers that's all they are income redistributors and income levelers and every time we go down this path and u.s economic history and world history but every time we do it here the u.s becomes frankly impoverished and stagnant falling way below its potential as jfk said and putting an end to the brilliant creativity of the private free enterprise economy we should all hope that the senate defeats all of these crazy tax ideas they should defeat it on a bipartisan basis we've never had anything like this in history

Channel: Fox Business

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Keywords: business news, fbn, fox biz, fox business, fox business channel, fox business kudlow, fox business larry kudlow, fox business network, fox business news, kudlow, kudlow monologue, kudlow monologue tonight, kudlow tonight, larry kudlow, larry kudlow monologue, biden administration, biden tax policy, economy, finance, fox business biden taxes, fox business taxes, fox business taxes raised, fox news taxes, middle class taxes, personal finance

Id: VIXWZT-UCVg

Length: 11min 2sec (662 seconds)

Published: Mon Apr 26 2021

Reddit Comments

[u/Lice138]

Yes...we can just tax everyone into prosperity