While the Big Beautiful budget bill recently enacted into law has a multiplicity of good, bad, and benign features, the law’s biggest and most beautiful feature is the continuation of the soon-to-expire 2017 income tax reduction enacted in Donald Trump’s first term. Although much of the American press has characterized this as a big gift to the rich, the empirical evidence paints an altogether different picture.
By 2019, the second year of the Trump tax cut and immediately before the economic disruption of the pandemic, total output rose by 3.2 percent annually, the greatest growth in 15 years. And it was the poor, not the rich, who disproportionately benefited. (RELATED: Take the Win on the Big Beautiful Bill)
The poverty rate in the last Obama year, 2016, was 12.7 percent, but it fell to 10.5 percent, the lowest level ever recorded, by 2019. Similarly, the black unemployment rate fell from 7.5 percent when Trump first took office to 5.5 percent in November 2019, also the lowest level ever recorded. But our federal system of government provides even more striking evidence of the power of low taxes to improve lives.
For example, people flee high-tax states for lower tax ones in astonishing numbers. Using recently released Census Bureau data, we looked at the interstate migration of native-born Americans over the four years from mid-2020 to mid-2024. (RELATED: What Migration Patterns Within the U.S. Tell Us About Policy)
There were nine states that generally did not tax income during that period: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. Some 1,970,582 more people moved into those states than away from them in those four years. That’s roughly 1,350 a day or nearly one person every minute. (RELATED: Americans Are Fleeing Blue States in Droves)
Contrast that to California (which has a maximum state income tax rate of 13.3 percent) and similarly taxed New York. Over 2.4 million more Americans left those states than ...