LARRY KUDLOW: Biden wants to punish success by redistributing income and wealth

The stock market, which was flooded today, is not always right as a short-term forecast, but it does give us a sense of whether the health and wealth of the country is rising or falling.

Last year, for example, that was Joe BidenIn his first full year in office, the S&P 500 fell 18%. This year, while the market started well, it is now faltering badly and is flat year-to-date.

This past week, especially after hearing from Jay Powell and the Fed and Joe Biden and his $5 trillion tax hike, the market started to sink again. The Dow is down about 1,500 points and the S&P is down 5%.

You have a Fed chairman who believes he should crash the economy instead of targeting inflationary price indices and you have a president who is dominated by the socialist left in his party. Are Bernie Sanders and Elizabeth Warren really running the White House? Hear what Senator Ted Cruz had to say last night:

Senator TED CRUZ:The sad truth is that socialists are in charge of the White House. Joe Biden certainly isn’t, but the people he’s been around have a very simple approach to everything, they want to spend money they don’t have, they want to raise taxes on you. They have unleashed record inflation. This budget that Biden put out is going to create a $50 trillion national debt, and their view is that they can just keep printing money and unleash inflation and keep borrowing money from China. It’s wildly irresponsible.”


WASHINGTON, DC – FEBRUARY 15: Ranking Member Ted Cruz (R-TX) speaks at a hearing with the Senate Commerce, Science and Transportation Committee on Capitol Hill on February 15, 2023 in Washington, DC. (Photo by Anna Moneymaker/Getty Images) (Anna Moneymaker/Getty Images/Getty Images)

There you have it, Ted Cruz lays it down. Now, real Biden budget writers aside, you don’t have to be a rocket scientist to figure out that the massive tax increases on corporations, individuals, capital gains – oh, and they throw in Medicare tax increases on wages and incomes and small business.

In fact, let’s not forget that small businesses under Biden’s tax hikes will be battered and slaughtered everywhere. You don’t have to be a rocket scientist to know that if you tax the primary sources of job creation and development, you will have — wait, wait a minute — fewer jobs and growth. This is Arthur Laffer’s saying. Art will be here in a few minutes.

Biden doesn’t have a clue about the incentive model of economic growth and prosperity. So if you raise the corporate income tax from 21% to 28%, the biggest hit comes to typical working families who bear the brunt. People pay taxes, not companies, and by the way, we are losing our international competitiveness.

When you tax wealth and capital gains, then you create high barriers to capital investment, which is really the seed of the economy, isn’t it? The negative impact of higher tax rates on saving, investment and entrepreneurship will do enormous damage to the economy.

Biden wants to punish success by redistributing income and wealth, but he doesn’t understand the common sense that if he doesn’t pay after taxes, then you get less work and less investment. If companies are not profitable after taxes, they will lay off workers and wages and family incomes will fall.

All this leftist socialist stuff has been debunked a thousand times, but, with Biden, here we go again…and, by the way, the $5 trillion in so-called tax increases, tax revenue, will never materialize.

Between tax avoidance and loss economic incentives that reduce growth, he probably wouldn’t get more than half of that $5 trillion in revenue, which blows up his whole bogus deficit reduction argument.

The real purpose of Bidenomics is to tax the rich in order to create a bigger welfare state. By the way, a larger welfare state without work requirements.


Joe Biden

President Joe Biden delivers a speech on infrastructure spending at the Carpenters Pittsburgh Education Center, Wednesday, March 31, 2021, in Pittsburgh. (AP Photo/Evan Vucci) (AP Photo/Evan Vucci/AP Newsroom)

So, he wants an expanded child tax credit. This will cost $430 billion. He wants an expanded earned income tax credit. This will cost $155 billion, $325 billion more in paid family and medical leave, $600 billion more in universal preschool, $200 billion in secondary education, two hundred billion more in Obamacare subsidies, just to name a few, and as i said all of these welfare benefits are increasing, no labor wages.

Now, his budget is of course dead on arrival this year, but the stock market is looking ahead and knows that a few stray boats here and there in 2024 could give you another sweep of the Democratic tri-branch. I sure hope not and I’d bet against it, but you never know, right?

This article was adapted from Larry Kudlow’s opening comment on “Kudlow” on March 10, 2023.

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