'You get less of what you tax more.' Alan Greenspan, et al
George Rebane
This morning on CSPAN I watched the House finally pass the long-fought tax reform bill, and send the legislation to President Trump for his signature. The Republicans are breathing a sigh of relief while the Democrats are still breathing fire. Actually, listening to the last floor debate cum kabuki dance, it is clear that this legislation has made every Democrat politician into a liar and/or a hypocrite. The death and destruction that they claim the new tax law will rain down on the middle class, the economy, and all the poor people in wheelchairs is countered by their own leftleaning Tax Policy Center and the Brookings Institute.
Both outfits report that 80-90% of Americans will see tax relief, and about 1% will not. The rest will stay about the same. America’s small businesses that create the most jobs will definitely see benefits come their way. Large corporations will be able to start bringing back already taxed overseas profits. It’s hard to believe what kind of unproductive uses of cash our old tax code has borne over the years – today Microsoft has 95% or $132B cash sitting overseas, and Apple has a mind-boggling $252B or 94% of its cash off-shore. The Democrats firmly believe that jobs are created by middle class and poor workers hiring each other, and that when those corporate monies come back to America, they will be spent for wine, women, and song in the biggest party ever for the rich.
Cooler and wiser heads know that about $1.5T of that repatriated cash will be spent for business expansion by people who actually know how to build/expand businesses and create jobs, instead of being taxed and spent (aka pissed away) through countless other non-productive government spending programs and regulatory costs. Everyone who has taken Econ 101 knows that our only hope for keeping the country from going down the fiscal drain is growth and more growth. And history shows that growth benefits from tax relief, and in capitalist America growth has even occurred in spite of taxes, but never because of higher taxes.
In the meantime, starting with Pelosi and Schumer, the Left has successfully sold the new tax law as a “tax scam” to their lamestream media lackeys who have dutifully repeated and reported the same to the public at large. The bottom line here is that fake news is very much alive and it works. People who haven’t a clue about what the bill contains believe it to be bad for them. According to Pelosi, 86M US families will see their taxes increase, and 83% of the benefits will go to the notorious ‘1%’. The bald fact is that over 47% of households pay no federal taxes at all, and this bill does nothing to reduce that fraction.
As a measure of how effective fake news is, we read from the latest WSJ/NBC News poll, 37% Americans believe our middle class will now pay more taxes, compared with 16% who believe they will pay less (the rest answered ‘don’t know’ or ‘about the same’). About one third believe that they and their family will pay more tax, compared to one out of six who believe they’ll pay less. And 56% believe wealthy Americans will pay less tax, to 6% who believe they will pay more. You can’t make this stuff up; it proves that the nation’s dumbth is manufactured fresh and anew every day when the sun rises.
The Republicans have one hell of a job ahead of them next year to get the message out on their tax reform law; the only wind at their backs will be what the people can actually see in their paychecks and their reduced tax bill (if they pay attention). And they better see a whole bunch of economic growth before they go to the polls next November.
Stay tuned for the presidential siggy.
[22dec17 update] Well, the new tax reform act is signed and on the books. The president did a “not fancy, rush job” signing the bill in the Oval Office with little fanfare, because there was enough of that yesterday. It was a class act. The Democrats are panicked out of their minds, hustling around the country telling anyone who would listen that their taxes were just raised, only the rich will benefit, and the economy will plummet taking jobs with it. This is not exactly the way our trading partners see things. From all over the world they are publishing sober assessments and informing their citizens that they will now have to travel on a rocky economic road because the American Eagle has had its ties loosened and will now soar again, higher than ever over the competitive world of international commerce. Joseph Sternberg in ‘US Tax Reform has Europe Worried’ does an excellent job summarizing what the real impact of the new tax law will be.
But not to worry. That rocky road can be avoided if EU’s economic giants also lower their corporate taxes to launch an economic boom that will lift the fortunes of all enlightened participants. And here’s the problem for the socialists on both sides of the Pond – they have all been selling a zero-sum narrative preaching that high taxes don’t influence corporate behavior, and more taxing and regulations are the real pillars of thriving economies and a happy social order. Reality gives lie to both of these ludicrous propositions. In the US, our socialists again have nothing to fall back on save the dreadful state of their constituents’ (especially the minorities) ability to comprehend, which has been achieved through their more than half-century control of our public education institutions. The demagogury of dumbth will reach new pinnacles in 2018; for the Democrats it simply has to, or Chuckie and Nancy will be sent home in tightly zipped political bodybags.
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