On Morning Joe, Larry Kudlow asserted that "on the campaign trail, Democrats trashing this economy, talking about raising taxes across the board are totally, utterly missing the boat here." In fact, the leading Democratic candidates for president have all proposed economic plans that include some tax cuts.
On the November 2 edition of MSNBC's Morning Joe, CNBC host Larry Kudlow discussed the state of the economy and asserted that "on the campaign trail, Democrats trashing this economy, talking about raising taxes across the board are totally, utterly missing the boat here." In fact, the three Democratic presidential candidates leading in polls -- former Sen. John Edwards (D-NC), Sen. Hillary Rodham Clinton (D-NY), and Sen. Barack Obama (D-IL) -- have all proposed economic plans that include some tax cuts.
- Expanding the Earned Income Tax Credit (EITC) for single adults and reducing the "marriage penalty" for 3 million families.
- Creating a tax credit that would match savings up to $500 a year for families earning up to $75,000, money "that could be used for retirement, college education, buying a home, investing in a small business or during a financial or medical emergency."
- Expanding the Child and Dependent Care Tax Credit to pay up to 50 percent of child care expenses up to $5,000 and making it partially for lower-income working families.
In a speech on economic policy on October 8, Clinton addressed reducing the tax burden on middle-income families. Clinton outlined tax policies that would include middle-class tax cuts, stating:
For middle class Americans, I will extend the tax cuts including the child tax credit, the marriage penalty relief, and lower income tax rates that they currently pay. And I will reform something called the Alternative Minimum Tax, the AMT, to make sure it doesn't hit middle class families with higher tax rates. It was never intended to do that. I will also expand the Earned Income Tax Credit to help families that are struggling to join the middle class. And I will be providing tax credits to help small businesses pay for health care.
- Create a refundable " 'Making Work Pay' tax credit of up to $500 per person, or $1,000 for working family" that would provide "relief to American families who face the regressive payroll tax system."
- Create a refundable universal mortgage tax credit to make the mortgage tax deduction available to homeowners who do not itemize their taxes.
- Eliminate income taxes for all seniors who earn less than $50,000 a year. According to his plan, this would "provide immediate relief to 22 million American seniors who will not need to file an income tax return, and will eliminate any income tax for nearly seven million seniors at a savings of roughly $1,400 each year."
- The plan also states: "Obama will also eliminate the capital gains taxation of start-up businesses" and "reduc[e] the self-employment tax for small business."
From the November 2 edition of MSNBC's Morning Joe:
SCARBOROUGH: Well, Larry, what's driving our economy now? If we have a horrible housing sector, usually when the housing sector goes belly up, that means the economy follows. What is driving this economy? Why do we have 4 percent growth? Why do we have lower unemployment rates than we had throughout the Clinton presidency? What's driving our economy right now when we hear so much bad news day in and day out?
KUDLOW: You have very strong businesses, Joe. Businesses are the backbone of the economy. I'm sorry the Democrats hate businesses, and I'm sorry that [Rep.] Charlie Rangel [D-NY] wants to raise taxes on businesses, but the great reality is you can't have a job without a business to create that job, and you can't have a business unless you have capital to fund the business.
So here the Democrats want to raise taxes on capital, they want to raise taxes on businesses. They say they're for the middle class, but the reality is, middle-class workers need businesses, and they need investment. That's what's driving this economy and has been for many, many years. You know, Joe, this is a 25-year story. This is a 25-year story going back to the early 1980s.
SCARBOROUGH: Started back in 1980 -- started back in 1983 -- 1982, 1983.
SCARBOROUGH: Larry, let me ask you this. With this news, positive economic news and hearing you talk, it sounds like this time next year -- I have this prediction: This time next year, the candidates are not going to be talking about Iraq. I think the key issue in the presidential campaign next year is going to be taxes -- who's going to cut taxes, and who's going raise taxes.
KUDLOW: It may well be. I think you're on to it, Joe. I think that the key issue is going to be the economy, and the key issue inside the economy is going to be taxes. I would add to that, Joe, the homeland security against global terror attacks against the United States. One of the things that's never talked about at all in addition to the economy is the fact that we have not been hit in six years, Joe.
That is an unbelievable thing, and it is a great grace not to have been hit in six years, but also, government policies that really strengthened our homeland defenses. And that's why I think you're right, Iraq itself, per se, alone is not going to be the dominant issue. It's going to be safety and security on the one side and economy and taxes on the other. And on the campaign trail, Democrats trashing this economy, talking about raising taxes across the board are totally, utterly missing the boat here. Americans don't want to lose their money. They want to keep it for themselves, so they can invest it, start little companies, start these little businesses, keep the jobs going, and keep the prosperity going. That's what they want.
SCARBOROUGH: All right. Larry Kudlow, thank you so much.