Kudlow: Taxing rich Americans is a lose, lose for innovation, investment
National Economic Council Director Larry Kudlow on the January jobs report on Democrats' push for tax hikes on the wealthiest Americans as well as Sen. Kamala Harris proposing Medicare-for-all.
Top White House economic adviser Larry Kudlow said Democrats’ tax plans threaten free-market capitalism.
“Taxing rich people – that’s an old saw from the left—it never works -- it never works,” he said to FOX Business’ Stuart Varney on Friday. “All you’re doing is blunting incentives, you know, for hard work, for investment, for risk taking, for innovation.”
Members of the Democratic Party are gunning for America’s wealthiest with higher tax proposals. But according to Kudlow, top earners are not only paying their "fair share" but also paying the most by a wide margin.
“Just as a factoid I see people saying, well the rich have to pay their fair share – I’ve heard that for almost 40 years, my entire career,” he said. “Do you know? Just for argument sake, the top 1 percent of Americans pay 37 percent of all the income taxes ok? And the top 1 percent basically pays more than the lowest 90 percent.”
Massachusetts Democrat Sen. Elizabeth Warren, a contender for the 2020 presidential election, has put forth a “wealth tax” that would levy a 2 percent annual tax on Americans with a net worth over $50 million. While New York freshman Rep. Alexandria Ocasio-Cortez is promoting a 70 percent income tax rate on income above $10 million for a new green deal.
However Kudlow said these are economy killers.
“Look the Counsel of Economic Advisers and the Tax Foundation have both priced out, you know, the 70 percent tax rate [and] the wealth tax,” he said. “They will actually cause the economy to slump. We will lost money. We will lose GDP, deficits will grow larger because revenues will come down.”
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California Sen. Kamala Harris, also running for president in 2020, is co-sponsoring “Medicare for all” with Vermont Sen. Bernie Sanders, who also recently proposed to dramatically expand the federal estate tax to 77 percent. But Kudlow said “Medicare for all” comes with hefty price tag.
“As far as “Medicare for all,” the costs are astronomical, variously estimated at $30 trillion or more,” he said, and he added that it would also damage the economy. “With wealth taxes and so forth all you’re doing is blunting incentives, you’re not going to get the innovation that makes America great.”
New Jersey Sen. Cory Booker, who just announced he is running for president, also proposed a tax increase plan.