The House tax plan is stellar: It goes a long way toward making the US far more competitive as a global destination for corporate investment capital; it dramatically lowers the pass-thru business rate for higher income private SMIDs, key drivers of US employment; and it simplifies the tax code while retaining its progressiveness. (I will have more on this in the coming days and weeks.)
The Wall Street Journal – the undisputed king of tax cut promotion – really, really pooped its pants this morning with its Half a Tax Reform piece, deriding the House tax plan as not growthy enough for upper income Americans.
The House plan moves the top bracket up to $1 million for joint filers, but retained the current 39% rate. The WSJ flat out wants a cut for these Americans under the assumption it would promote growth. This is complete and utter nonsense, as the job creators are receiving a massive boost via the corporate and pass-thru business cuts/reform. The economy does not grow by those earning more than $1 million of passive income having more of their after-tax income to spend.
If anything the House plan should redistribute more by massively hiking the rate on those earning more than $10 million in order to reduce the middle class tax rate to 0% on income up to say $100,000. This would mean that those making up to $100,000 would “only” pay the all-in payroll tax rate of circa 15% (including the employer’s share).
The WSJ should be ashamed of itself, as this hideous piece puts it squarely in the same partisan camp as The New York Times.