By David Harsanyi
Friday, May 03, 2019
For those of you who survived the Great GOP Tax Cut
Massacre, things are finally looking up. The unemployment
rate fell to 3.6 percent last month, the lowest level since
1969. We’ve now experienced over a full year of unemployment at 4 percent or
lower. The economy beat projections, adding another 263,000 jobs in April.
Wages are rising.
It was Larry Summers, Bill
Clinton’s former Treasury Secretary and Barack Obama’s White House economic
adviser, who warned that
tax reform would lead to over 10,000 dead Americans every year in December of
2017. Summers, considered a reasonable moderate by today’s political standards,
was just one of the many fearmongers.
The same month, after cautioning that passage of tax cuts would portend
“Armageddon,” then-House Minority Leader Nancy Pelosi explained that
the 2017 Tax Cuts and Jobs Act (TCJA), a reform of corporate tax codes and a
wide-ranging relief, was “the worst bill in the history of the United States
Congress.” Worse than the Fugitive Slave Act? Worse than the Espionage Act?
Worse than congressional approval of the internment of Japanese Americans?
That’s a really bad
bill.
The tenor of left-wing cable
news and punditry was predictably panic-stricken. After asserting that the cuts
wouldn’t help create a single job, Bruce Bartlett told MSNBC
that tax relief was “really akin to rape.” Kurt Eichenwald tweeted that
“America died tonight … Millenials [sic]: move away if you can. USA is over. We
killed it.” “I’m a Depression historian,” read
the headline on a Washington Post op-ed. “The GOP tax bill is
straight out of 1929,” proclaimed the same writer. And so on.
None of this is even getting
into the MSM’s straight news coverage, which persistently (and falsely) painted
the bill as a tax cut for the wealthy. “One-Third of Middle Class Families
Could End up Paying More Under the GOP Tax Plan” noted Money
magazine. An Associated Press headline read,
“House Passes First Rewrite of Nation’s Tax Laws in Three Decades, Providing
Steep Tax Cuts for Businesses, the Wealthy.” “Poor Americans Would Lose
Billions Under Senate GOP Tax Bill” reported CNN.
Yahoo News ran one piece after the next predicting doom.
The GOP tax cut’s “unstated
goal is to leave the poor and vulnerable in America without the support of
their government,” ABC News pretend centrist claimed.
“It’s not enough to give money to rich people. Apparently, Republicans want to
kick the poor and middle class in the face, too,” a columnist at Washington
Post noted,
leaning hard into two of the stalest canards about tax policy.
Of course, the notion that allowing Americans to keep more of their own money
is tantamount to “giving” them something is just transparently specious. Does
any liberal really maintain that government owns all your income, and anything
you keep is a gift? Tax rates were not handed to us on Mount Sinai, they were
cooked up by economists. In truth, you only “give” taxes, you never keep. And
the government only spends.
In any event, the idea that
the poor or middle class are being shaken down by the cuts was even more of a
dishonest claim. As Chris Edwards has pointed out, the
TCJA’s largest percentage tax cuts went to the middle class. Even the liberal
Tax Policy Center estimated that 65 percent Americans paid
less last year (6 percent paid more) due to tax reform. More
than 44 percent of Americans pay
no federal income tax. (Though corporate taxes are also a tax on
consumers, so cuts benefitted nearly everyone.)
That hasn’t stopped former
vice president Joe Biden. “There’s a $2 trillion tax cut last year. Did you
feel it? Did you get anything from it? Of course not. Of course not. All of it
went to folks at the top and corporations,” the presidential hopeful claimed
the other day. It’s a fabrication.
Whenever you hear people
bellowing about the wealthy benefitting most from across-the-board tax cuts,
they always leave out the fact that wealthy pay the vast
majority of income taxes: the top 20 percent of income earners
paid over 95 percent of individual income taxes in 2017, the top 10 percent
paid 81 percent and the top 0.1 percent paid nearly a quarter of all federal
income taxes.
Now, I realize it’s unfashionable to mention that Ronald Reagan’s 1981 Economic
Recovery Tax Act, an across-the-board 25 percent cut in tax rates, helped spur
a 40-plus year boom after a decade of stagnation. Since that time, the Left has
been dependably wrong about tax relief and deregulation. Because once again,
tax relief has spurred economic growth. It’s stimulated
higher productivity, and it’s created
jobs.
In 2010, Barack
Obama warned that a “new normal” had gripped the
economy; that businesses would have fewer employees and the job market wouldn’t
regain its footing. The same people who supported and presided over the slowest
economic recovery in US history—despite having the most room for growth and
despite throwing unprecedented amounts of money at the problem—are the nation’s
biggest Chicken Littles.
“So we are very probably
looking at a global recession, with no end in sight,” The New York Times’ Paul
Krugman told
us after the election of Donald Trump. This is the same Krugman
who has spent the past few weeks mocking and belittling now-former Fed nominee
Stephen Moore, who happened to be mostly right
about tax reform.
Supply-side economics isn’t a
panacea. We’re racking up debt and continuing spending as if it doesn’t matter.
Not all the underlying numbers are positive. There are thousands of economic
unknowns that can’t be quantified or computed by economists, which is why the
central planners and technocrats are
almost always wrong. And yes, when the recession finally comes, as
it always does, liberals will once again blame tax cuts and deregulation. But
to be this wrong this often deserves recognition.
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