Hillary Clinton’s big ideas for tanking the US economy
The latest spin out of Washington is that stock-market declines over the last 10 days are due to Donald Trump’s surge in the polls. Wall Street tends to hate change, even when it’s positive. And Donald Trump may be seen as a change agent who will rattle the cages in Washington, and perhaps on Wall Street.
But something else is being overlooked here: Hillary Clinton’s economic agenda and the financial markets.
Hillary says she has a cabinet full of ideas. Unfortunately, most of them are dimwitted. Here are five that could hurt employment, growth and stocks.
1) Raise the minimum wage to $12 or even $15 an hour. Clinton might as well call this the Teenage Job Elimination Act. Even the liberal Congressional Budget Office recently estimated a $12 minimum would reduce the number of starter jobs by as many as 1 million. Seattle recently raised its minimum to $11 and is headed to $15. An assessment by the University of Washington finds that so far that move had the “negative unintended consequence” of fewer hours worked and fewer jobs.
2) Hike taxes. There isn’t an economic philosophy known to man that says raising taxes will help the economy. But Hillary wants to give it a try, to the tune of $1.5 trillion sucked out of the economy.
Under her plan, the federal income-tax rate would rise to above 45 percent, and the death tax would go to 65 percent for the very rich. Capital-gains taxes would nearly double.
History proves raising tax rates is the least effective way for the government to raise revenue. IRS statistics indicate that most of the people who fall into the top 2 percent of income are small-business owners — and they are America’s major employers. Tax them more, and they’ll employ fewer.
In the 1980s when income-tax rates were slashed from 70 percent to 28 percent, the amount of tax revenues over the decade doubled, and the share of taxes paid by the rich increased. All you have to do is look at the high-tax states like Connecticut, Illinois and New York and you can see the jobs and people fleeing.
Our highest-in-the-world business-income-tax rate has caused companies like Burger King and Johnson Controls to head to more tax-hospitable climes. Hillary’s plan may speed up this exodus.
3) Subsidize 500 million solar panels. We tried these green-energy handouts under President Obama, and they failed. Remember Solyndra? That firm received some $500 million of taxpayer dollars and then went belly up.
The Institute for Energy Research estimates a price tag of $200 billion for these solar panels. That’s more than it cost to put a man on the moon during the Apollo project.
Let the free market pick the next great energy source, which may be clean-burning natural gas.
4) Offer free college tuition. One of the greatest financial scandals in America today is the cost that universities and colleges are charging students and their families. Some colleges now charge $60,000 a year for room, board and tuition, and the average cost is near $30,000. But if students and families aren’t paying these costs, taxpayers will have to, and costs will spike even higher.
Universities will raise tuition, as they have every time the government has provided more subsidies.
Better to require every school to freeze tuition as a condition of receiving federal aid. Purdue has done this. Why not require schools with billion-dollar-plus endowments to use some of that money to lower the tuition for families?
5) Increase Social Security benefits. Hillary wants to fatten benefits to certain senior citizens and raise the Social Security tax to “pay for it.” Really? The system is already tens of trillions of dollars in the red, according to the Social Security Administration’s actuaries. Now we are going to increase the outflow and make even bigger benefit promises? She would also apply the payroll tax of 12.4 percent on wages of up to $250,000 (up from about $110,000 today), which would be one of the biggest tax hikes of all time.
Trump would cut taxes, reduce regulation, produce more American energy, provide school vouchers for families in failing school districts and kill ObamaCare. If Wall Street thinks this agenda is worse for stocks than Hillary’s tax-spend-and-subsidize agenda, the country’s in even worse shape than I thought.
Stephen Moore, an economist with Freedom Works and a Fox News contributor, is an adviser to the Trump campaign.
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