The Media’s Inflation Fears: A Misguided Attack on Tax Cuts


The media’s latest claim is that extending the Trump tax cuts would unleash a wave of inflation. The New York Times led the charge with a front-page story warning of price surges, citing the same arguments made against Ronald Reagan’s tax cuts in the 1980s.

However, history has consistently shown that reducing tax rates does not lead to inflation. In fact, the rapid period of disinflation under Reagan, following his tax cuts and tight monetary policy, is a clear example of the benefits of supply-side economics.

The skepticism surrounding tax cuts stems from a misunderstanding of the supply-side effect. Producers respond to increased incentives by investing, producing more, and hiring more people. This surge in supply reduces prices, not increases them.

The 2017 Trump tax cuts saw corporate tax rates drop from 35% to 21%, with corporate tax collections rising by nearly 50% since then. The richest 1% also paid a larger share of total income taxes.

It’s absurd to claim that a Trump presidency would lead to higher inflation rates than a Biden presidency. The inflation rate under Trump was nearly the lowest of any modern president, while under Biden it was one of the highest. How could a Trump victory be worse for inflation?

The media’s also making a mockery of themselves by arguing that Trump’s proposed 10% across-the-board tariff would cause price increases. However, this ignores that the tariffs would likely be offset with tax reductions, leaving the overall effect close to neutral.

It’s clear that some pundits are deeply confused about economics, suffer from “Trump Derangement Syndrome,” or perhaps both.

Stephen Moore
Stephen Moore
Stephen Moore is a senior fellow at the Heritage Foundation and a co-founder of the Committee to Unleash Prosperity.

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