Right-wing media figures are toasting United Kingdom prime minister Liz Truss’ massive tax cuts geared toward the wealthy as a potential model for the U.S. if Republicans return to power.
“I love what Liz Truss is doing in England,” perpetually wrong right-wing economics commentator Stephen Moore said during a Monday appearance on Fox Business. “I think it is exactly the right agenda of cutting taxes.”
The former Trump adviser added that Truss is doing “exactly what the United States should be doing,” and predicted that “the cavalry is coming” if the GOP dominates in the November midterm elections.
But British voters are less enthused – in fact, polls show they oppose Truss’ tax cuts and are revolting against her leadership. Meanwhile, the pound is cratering amid reports that the tax cuts will generate a huge increase in inflation.
In the UK, the Conservative party pushes for trickle-down economics
When Truss ascended to the prime ministership three weeks ago after scandal-plagued Boris Johnson was forced to step down, she promised to “reduce the burden on families.” But all families will not be treated equally under her government’s tax proposals, which are estimated to wipe out £45 billion in government revenue over the next five years.
“The rich are the biggest winners of Britain’s tax-cutting gamble,” CNN reported Monday after reviewing the tax package the UK’s finance minister announced last week. The cuts include slashing the income tax from 45% to 40% for the highest earners, the elimination of a cap on bankers’ bonuses, and the cancelation of a planned increase in the corporate tax.
“A small number of extremely high-income individuals will gain so much” from the cuts, according to the Institute for Fiscal Studies. The group projects that the approximately 1% of tax-payers who currently pay the top income tax rate will get an annual average of £10,000 back. Taxpayers with annual incomes of £1 million will see their income taxes fall by four times as much, according to IFS estimates.
The tax cut roll-out has Britain’s Labour Party surging to “its largest poll lead in over two decades,” with a 17-point lead in YouGov’s latest poll, Reuters reported on Monday. Huge majorities of respondents oppose lowering the 45% income tax rate for top earners and removing the cap on bankers’ bonuses in particular.
After hearing about the Conservatives’ economic package, 57% of respondents said the measures were not fair; 60% said they were not affordable for the country; and only 9% said the changes would leave them and their families better off.
British currency has been plummeting due to investor fears that the Truss tax cuts, and the resulting borrowing needed to recover the lost revenue, will worsen inflation in the U.K., which already stands at 10%. Sterling hit a 37-year low against the dollar on Friday, trading at roughly $1.10, then an all-time low after a Monday swoon, closing at $1.03. Economists are sounding the alarm that the U.K. could face a run on the pound and an economic crisis.
Things have reached the point where the International Monetary Fund, the institution called upon to bail out beleaguered debtor states, is publicly warning against Truss’ economic policy.
On the other hand, right-wing commentators who tell Republican voters what they should think about the economy are overjoyed.
Fox commentators: Truss tax cuts are “terrific” and “exactly what we should be doing here”
On Fox News and its sister channel, Fox Business, right-wing media figures have lavished Truss with praise for her tax cut scheme, and repeatedly cited her work as a model for the GOP.
Larry Kudlow, the right-wing CNBC host-turned Trump economic adviser-turned Fox Business host, opened his show on Friday with a monologue drawing a direct connection between the tax cuts Truss had rolled out and the GOP midterm election platform U.S. House Minority Leader Kevin McCarthy (R-CA) unveiled the same day.
“The U.S. midterm elections cavalry arrived early in London,” Kudlow said. “What do I mean by that? Well, the new British prime minister, Liz Truss, has laid out a terrific supply-side economic growth plan which looks a lot like the basic thrust of Kevin McCarthy's Commitment to America plan.”
“I just love it,” Kudlow said of Truss’ tax cuts, adding that she “has it exactly right.” After praising her “Reagan/Thatcher/Trump economic policy” and urging her not to “delay the tax cuts,” the host turned to the United States. He praised McCarthy’s proposal as “pro-growth, supply-side agenda” that he said “would tackle inflation by curbing excess spending, by cutting taxes and moving back to Donald Trump's deregulation policies.”
Other examples include:
- Fox Business host Stuart Varney highlighted Truss’ proposed tax cuts, then asked Kudlow, “Wouldn’t it be wonderful if she were pointing the way for America?” Kudlow replied that Truss is “my kind of gal,” adding that “we did the same thing during the Trump years” and that “we need supply-side tax cuts here to rejuvenate the economy.” [Fox Business, Varney & Co., 9/20/22]
- Varney promoted Truss’ “historic tax cuts” and commented, “Truss is doing economic policy right, President Biden is doing it wrong.” He turned to Fox host Steve Hilton, who argued that in contrast to Biden’s “anti-growth policies,” Truss’ tax cuts would lead to a “booming economy,” adding that it was a “really exciting moment.” Varney agreed, adding, “it’s just a shame we can’t copy it over here.” [Fox Business, Varney & Co., 9/23/22]
- Kudlow also praised Truss’ tax cuts as “Reagan-Thatcher vintage stuff,” and as “exactly the right thing to do.” When Fox Business host Charles Payne said, “I give Liz Truss props like you did,” and asked whether the U.S. can “get back there also as a nation,” Kudlow replied that “the cavalry is coming in November,” and that cutting taxes in the way Truss proposed is “exactly what we should be doing here.” [Fox Business, Making Money, 9/23/22]
- Wall Street Journal columnist Mary Anastasia O’Grady cheered Truss’ tax policies as “a hit” on Fox’s The Journal Editorial Report. She concluded, “rule Britannia,” to which guest host David Asman replied, “in Liz we trust.” [Fox News, The Journal Editorial Report, 9/24/22]
- Trump administration economics adviser Kevin Hassett told Fox host Neil Cavuto that the proposed U.K. “supply-side tax cuts” are “a good start,” adding, “you’ve got to get more supply if you want to get ahead of the curve on inflation, and I think Liz Truss is right to do that.” [Fox Business, Cavuto Coast to Coast, 9/26/22]
Republicans seem eager to follow Truss’ lead. In a Sunday Fox appearance, Rep. Steve Scalise (R-LA), the second-ranking House Republican, said that “Europe is leading the way” by electing “bold conservative women” like Truss and Italy’s far-right party leader, Giorgia Meloni. He added, “We need to bring that kind of conservatism back to the United States.”
It is a truth universally acknowledged, that a Republican Party in possession of a governing majority must be in want of a tax cut for the wealthy. And the response to Truss shows there will be a substantial push to reignite such policies should the GOP regain control of Congress and the White House.