Stephen Moore: Low tax rates fuel US stock boom from 800 to 50,000 Dow Jones
If anyone predicted that the Dow Jones would surpass 50,000 in a little over four decades, they might have been committed to a mental institution. but US stocks grew 60 times (not including inflation). Even accounting for inflation, the Dow Jones index rose nearly 12-fold. We have lived through the greatest period of wealth creation perhaps in the history of the world.
No other country in modern times has come close. Consider it Publicly traded US companies It is now worth more than $70 trillion.
Is China catching up? Yes, but they have a lot of work to do even though they outnumber us four times. The market value of all Chinese companies is estimated at about $11 trillion. The market capitalization of all EU countries is approximately $16 trillion. Japanese companies are worth $7 trillion.
Our wealth is almost equal to the wealth of the rest of the world’s countries combined, even though we represent only 5% of the world’s population. This should make you jump out of your chair screaming, “USA, USA, USA!”
We have lived through the greatest period of wealth creation perhaps in the history of the world.
This surge in wealth did not happen by chance. It’s a victory for good economic policy — including the sharp decline in tax rates and taming of inflation marked by two of our greatest pro-business presidents, Ronald Reagan and Ronald Reagan. Donald Trump.
Stephen Moore: Economists miss Trump’s boom — and won’t admit it
Go back to 1981 when Reagan took office: Inflation was running at about 12% Higher income tax rate It was 70%, the corporate rate was 46%, the estate tax was 70%, and the capital gains rate was 28%. The economy was in a state of collapse.
Today, inflation is approximately 3%, the top income tax rate is 39.6%, the corporate tax rate has fallen to 21%, the estate tax is 40%, and capital gains are taxed at 23.4%.
And the show’s stalwarts like Steve Forbes, Arthur Laffer, and Larry Kudlow should bow down. They were right about lowering tax rates and inflation, and stimulating growth and prosperity. Income redistributors were wrong when they claimed that the rich would pay much less in taxes. They pay more. Now the top 1 percent of the population pay nearly 40 percent of income tax.
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This is the good news. The bad news is that many Democrats have not learned the lesson that lower tax rates lead to greater prosperity. Incidentally, evidence also suggests that even with these low tax rates, the richest 1% are paying a higher share of the tax burden than ever before.
The city in the United States with the combined highest federal/state/local income tax rate is New York City. The new mayor, Zahran Mamdani, was elected and promised that millionaires and billionaires would pay more taxes to cover the $10 billion deficit.
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California is our most populous state. Liberal Democrats want the country’s first wealth tax on the ballot that’s already been on the ballot Create an exodus of millionaires And billionaires outside the country.
Meanwhile, back in Washington, DC, Trump predicts the Dow Jones It will reach 100,000 by the time he leaves office. This is certainly a major accomplishment, but the past four decades have proven that supply-side miracles can happen.
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