The further to the left or the right you move, the more your lens on life distorts.

Friday, April 28, 2017


It's as predictable as a sun rise in the East. Whenever any politician suggests that:
  • taxes are too high,
  • those high taxes stifle economic growth,
  • too few people pay most of the freight for the larger majority,
  • a significant minority pays no income taxes at all and therefore ha absolutely no incentive to question the federal spending that drives the demand for higher and higher taxes,
  • far too many special interests get far too many unjustified tax breaks,
  • completing the average tax form should tax minutes, not multiple hours or days,
  • record keeping requirements are onerous and unrealistic, and in recent years,
  • the taxing authority (the IRS) has been used to target some citizen who don't have the 'approved' political views
the Democrats go ballistic. The party of big intrusive government pulls out the same tired arguments against tax reduction, revs up it class warfare narrative, and screams bloody murder. In many cases, the demagoguery works and any reasonable attempt at tax reduction and reform is buried in hysteria over "the rich" paying less in taxes.

Kim Strassel illustrates this by commenting on a The New York Times "news" story about Donald Trumps suggestion that major tax reform is necessary and outlining the basic principles he will advocate. She writes:
Here’s how to know a Republican president has scored big on a proposed tax reform: Read the New York Times —and chuckle.

The newspaper’s headline Wednesday lectured: “White House Proposes Slashing Tax Rates, Significantly Aiding Wealthy.” The story said that Donald Trump had offered a “radical reordering of the tax code,” though one that he “rushed” so as to “show progress before the 100-day mark of his presidency.” The proposal was but a “skeletal outline” and “less a plan than a wish list.” It contained “no explanation of how the plan would be financed.” And, oh, it would “richly benefit Mr. Trump” personally. This was a news article, by the way, not an editorial.
Trump's tax proposals have not been fully fleshed out and will be modified by the Congress, but his ideas are big ideas—a significant revamp of tax rates including corporate rates, a major modification to deductions that almost always benefit special interests, a simplification in income tax reporting, and as a consequence, a major stimulus for job creation and the economy in general.

I have no doubt that I'll offer many additional posts on taxes and tax reform as we move forward. At this stage, however, it is amusing to see one party suggest change while the other uses the same tired talking points and the same class warfare memes to maintain a status quo that has led to economic malaise.


The Democratic faithful who make the argument that any tax reform proposal is designed solely to help "the rich" are either innumerate or disingenuous. As a grossly simplified example, assume that a tax proposal suggests that "the rich" get a tax reduction of 4 percent, while the middle class gets a tax cut of 10 percent. The middle class taxpayer originally payed, say, $12,000 in taxes and will get a reduction of $1200. The rich person payed $45,000 in taxes and gets a reduction of $1800. The Democrats cry, "The rich are getting a bigger tax cut than the middle class—the horror!"

Of course the overall tax bill for the middle class taxpayer becomes $10,800 while the overall tax bill for the rich taxpayer is $43,200—about 4 times higher. But for far too many Democrats, the mathematics of percentages appear to be far too complicated, and as a consequences, they rely on absolute numbers, but only for the tax cuts, not for the number of dollars actually paid in taxes.