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

Saturday, December 02, 2017

Taxes, Myths, and the Dems

For the first time in quite a while, the United States Senate acted like a governing body. The GOP somehow balanced political posturing and good ideas, addressed both philosophical and pragmatic political differences with compromise, salved bruised egos, and came up with the first tax reform package in almost 30 years. It has been long over due.

The Senate Democrats stayed on the sidelines, sniping at every idea. The Dems have become the party of Big Intrusive Government (BIG)—a leftist notion that defines a massive centralized government that is designed to extract as much money as possible from its citizens. That's the real reason the Dems love taxes and more taxes.

Throughout the tax reform debate, the Democrats made noises about providing tax cuts for the "middle class." But to feed the rapacious needs of BIG, they're happy to raise taxes on those who already pay the overwhelming majority of all income taxes. It's a classic soak the rich scheme, and it's an economy killer. Don't believe me? Think back to the pathetic economic performance during the high-tax, massive regulation Obama years—GDP under 2 percent for eight years, low labor participation rate, and economic stagnation. The Dems even had the chutzpa to suggest that a bad economy was the "new normal."

Kim Strassel comments:
Democrats have a lot to say about the Republican tax-reform plan, including that it is a “middle class con job” and is going to cost the GOP its congressional majorities. That’s quite the bold claim, coming from the party that is in fact in uncharted tax-politics territory.

Americans have short political memories, which means it is no longer possible to remember a world in which Democrats didn’t hate tax cuts. And in the mainstream media—which shares the left’s penchant for class warfare—it’s also no longer possible to read an analysis that doesn’t assume Democrats are on the right side of history, that these tax cuts are “unpopular,” and that this reform holds grave political risks for Republicans.

Based on what? Democrats certainly have no modern evidence of these propositions, since they’ve never uniformly opposed tax cuts. In fact, it’s been 16 years since the party even engaged in a big tax brawl, during George W. Bush’s first year as president. What’s striking is just how many Democrats enthusiastically signed on to Mr. Bush’s tax bill, and just how far off the political rails the party has gone in the intervening years.
The class warfare arguments that today's Dems use (reliably parroted by the trained hamsters in the media) are effective, but they're also completely dishonest. It's comical to listen to Chuck Schumer warn the GOP that passing these tax cuts will somehow ruin their election chances in 2018. It's truly touching that Chuck cares so much about the GOP election chances, isn't it?

Alfredo Ortiz describes the myths that Dems and their trained hamsters in the media use to make the case that cutting taxes is a bad idea:
MYTH 1: The tax bill is a tax increase on the middle class.

Senator Cantwell: “Raising taxes on the middle class is wrong, and that’s what this bill does.”

Recognizing the popularity of a middle-class tax cut, Democrats are trying to use the Bizarro-world argument that the tax cut bill is actually a tax increase. They cite a Tax Policy Center report claiming the bill would raise taxes on 87 million middle-class families ...

In reality, the tax bill would provide significant relief for the middle class by doing the following: doubling the income threshold under which families pay no taxes at all to $24,000; doubling the child tax credit to $2,000; and eliminating the 15 percent tax rate in favor of an expanded 12 percent rate, among other provisions.

The above changes would save ordinary families thousands of dollars a year.

MYTH 2: The majority of the tax bill’s benefits go to the top 1 percent of earners.

Sen. Sanders: “60 percent of the tax benefits in the Republican plan would go to the top 1 percent.”

Democrats are trying to distract from the bill’s middle-class tax relief by claiming most of the benefits go to the super-rich. But in reality, the bill is targeted at the middle class.

In addition to the middle-class provisions mentioned above, consider the bill’s relief for Main Street small businesses. The bill offers a 20 percent small business tax deduction for all small businesses earning less than $500,000 a year.

This 20 percent tax deduction would allow small business owners to keep more of their earnings, helping them to compete with their big business and international competitors – as well as hire more employees, raise wages and expand ...
Given this clear middle-class relief, how do Democrats back up their 1 percent claim? By pointing to the tax bill’s provision to bring the corporate tax rate in line with international standards.

However, survey and economic evidence demonstrates that corporate tax cuts benefit the middle class in the form of higher wages, better workplace benefits, new job opportunities and lower consumer prices ...

MYTH 3: The tax bill will grow deficit by $1.4 trillion.

Sen. Sanders: “This legislation will grow the deficit by $1.4 trillion. Mark my words.”

Democrats are suddenly pretending to care about the nation’s fiscal state by pointing to the tax bill’s $1.4 trillion of lost revenues on a static basis over 10 years. What isn’t said is that this is only a 3 percent drop from the $43 trillion Congressional Budget Office (CBO) revenue projection over this timeframe.

But in the real world – outside of simplistic Excel spreadsheets – people respond to incentives. With more money in their pockets and in their communities, consumers, businesses and investors will spend more, creating economic growth that will more than pay for the $1.4 trillion in lost revenues.

According to the CBO, every 0.1 percent increase in the gross domestic product adds over $250 billion in revenue over 10 years. This means that even returning to 2.5 percent economic growth – still well below the U.S. historical average – would more than pay for the tax cut.

MYTH 4: The tax bill won’t create economic growth.

Sen. Cantwell: “No, I don’t think (the tax bill) will grow (the economy).”

Given the dynamic effects on tax revenue from even minor economic growth, Democrats are at pains to deny the growth created by tax cuts. They cite left-wing economists to make their case – but historical evidence and commonsense undermine it.

The tax cuts enacted under Presidents Coolidge, Kennedy and Reagan, among others, all generated several years of supercharged economic growth. The principle is simple: More money in the wealth-creating hands of the private economy – and less in the wealth-destroying hands of government – creates economic growth ...

MYTH 5: The tax bill will cause 13 million people to lose health insurance.

Sen. Sanders: “This bill… will result in 13 million people losing their health insurance.”

Given this scare tactic worked so well to kill health-care reform, Democrats are trotting it out in an attempt to do the same to tax reform. But the facts are very different this time around.

Far from kicking people off health insurance as Democrats imply, the tax bill would simply eliminate the health-care tax on those who choose not to purchase health insurance. This tax is borne mostly by working- and middle-class Americans: Nearly 80 percent earn $50,000 a year or less. In fact, this provision would reduce the middle-class tax burden even further ...
In reality, the Dems have done everything possible to submarine tax reform,  even when a GOP win is also a pro-growth win for the American people. They're frightened that allowing Americans to keep more money in their pockets will ruin their election dreams, both in 2018 and 2020. That's the ugly truth of it.


In a fact- and evidence-free op-ed Pat Garofalo provides us with the typical Democratic talking points, suggesting in his op-ed that taxes should go up, not down:
On Capitol Hill, Senate Republicans are barreling ahead on a tax bill that will do precisely none of the things they've advertised. Instead of the promised wage-boosting shot of adrenaline into the economy, the bill will almost assuredly blow a ton of money on those who need it the least, while lining the pockets of the corporate class. As I've noted before, the economic rationale for this thing is nonexistent.

But there's a bigger problem too: The entire bill is premised off the belief that taxes are too high and need to go down, when the opposite is actually true.
In order to support ever-growing BIG, Dems demand more and more tax dollars, inventing reasons to tax and spend. The irony is that their spending (designed to mollify their biggest voting blocks) outpaces their ever-increasing taxation revenues and still increases the federal debt. Their only argument is the vacuous class warfare claim that any tax decrease is all about "lining the pockets of the corporate class"—a group that already pays about 70 - 80 percent of all income taxes collected.

After all, those with "lined pockets" won't ever spend the "lining" on goods and services produced by middle class workers, thereby providing overtime or other benefits; they won't invest in business improvements, thereby acquiring business equipment and services provided by supplier who empoly middle-class workers; they won't hire more people, reducing unemployment and providing opportunity for advancement for members of the middle class, they won't encourage investors, leading to stock market gains that grow the 401-Ks held by significant numbers of middle class workers. Nah, they'll just sip champagne and eat caviar—at least that's what they'll do in the fevered imaginations of the Left.


Prominent social justice warrior and hard-core leftist Bernie Sanders tweeted:
FACT: Under the Republican plan, a single mother making minimum wage with two kids would get only a $75 tax credit. Meanwhile, a family making $500k with two kids would get a $4,000 tax credit. #TaxDebate
FACT: A single mother making minimum wage with two kids would pay no income taxes—none! In addition, she would be eligible for an earned income tax credit, food stamps assistance and potentially, medicaid, housing assistance, free or low cost mobile phone and internet access and many other government programs, all paid for by the families who do pay income taxes.

FACT: A family making $500k with two kids, after an assumed $125,000 in deductions would pay approximately $120,000 in federal income tax.

You would think that a mom, a dad and two kids paying $120,000 in taxes would have paid their  "fair share," but it appears that Senator Sanders doesn't agree.