Left's Unhinged Response To Trump Tax Cut Reveals Their Real Fear: What If It Works?
Terry Jones
The Investor’s Business Daily Editorial
December 24, 2017
As tax cuts become a reality, Democrats have gone ballistic, claiming that the GOP's sweeping tax plan will rob the middle class and the poor, line the pockets of the rich, and tank the economy. It's all false, class-warfare claptrap, and they know it.
Following passage of the Republican tax reform, Democrat politicians and leftist media celebrities have become nearly unhinged, and that may be an understatement.
House Minority Leader Nancy Pelosi called the tax cuts a "scam" and "simply theft, monumental, brazen theft from the American middle class and from every person who aspires to reach it." She added that it was "not a vote for an investment in growth or jobs," but "a vote to install a permanent plutocracy in our nation." Plutocracy?
Not to be outdone, former Democratic presidential candidate and millionaire socialist Sen. Bernie Sanders of Vermont called it "a great day for the Koch brothers and other billionaire Republican campaign contributors who will see huge tax breaks for themselves while driving up the deficit by almost $1.5 trillion."
Celebrity leftists fared no better. "Woman, mother, grandmother, sister, daughter, you have betrayed us all," former comedian and TV host Rosie O'Donnell tweeted at Maine Republican Sen. Susan Collins, who voted for the tax cut plan. "Dear god, ask for forgiveness, redeem your soul tomorrow."
She even offered her $2 million in cash to vote "no."This is how desperate the left has become, and how divorced from reality. For all the talk of how tax cuts will line the pockets of the rich and destroy the economy, virtually no one in the mainstream of the economics profession, left or right, agrees.
The Tax Policy Center (TPC), a liberal think tank, noted that more than 80% of Americans will get tax cuts under the plan just passed. And the benefits will go to every income group, not "billionaires." This, by the way, is bolstered by other recent analyses by Congress' Joint Committee on Taxation and by the widely respected nonpartisan Tax Foundation.
TPC estimates an average tax cut of about $2,140 per person. By the way, some 16% of the richest Americans — those in the top 0.1% of incomes — will face an average tax increase of $387,610.
Brian Riedl of the Manhattan Institute, further crunching the TPC numbers, found that while the top 1% of incomes now pay 27% of all federal taxes, they will get just 21% of the tax cuts. The bottom 80%, including the middle class, pays only 33% of all taxes, but will take home 35% of the tax cuts.
Of the 12% who will face tax hikes, they're overwhelmingly among the rich — not the middle class.
So, no, it's not "tax cuts for the rich." That's a totally bogus argument.
For that matter, so are the arguments that tax cuts tank the economy. History is replete with examples of why that isn't true.
The tax cuts on corporations and small, pass-through businesses, along with letting companies immediately expense the cost of new equipment, should lead to more business investment. So should shrinking the death tax, which should encourage more small-business investment.
How much more is an open question, but the Heritage Foundation, which employs a widely used economic model, estimates that the tax cuts will tack on 2.2% to long-term GDP, or roughly $3,000 per household.
That estimate includes a 4.5% jump in capital investment, mainly in equipment, and a hefty 9.4% gain in business structures. Along with expected rises in both the number of jobs and hours worked, after-tax wages for the average worker will be 3.5% higher than they would have been without the tax cuts.
Others see more modest, yet still significant, gains. The Tax Foundation, for instance, forecasts a long-term permanent rise of 1.7% in GDP and 1.5% for wages. It also sees 339,000 new jobs.
These aren't pie-in-the sky guesses. As history clearly shows, growth-oriented tax cuts such as these almost always have major benefits for the economy and for average workers. During the 20th century, big tax cuts in the 1920s (Harding, Coolidge), 1960s (Kennedy) and 1980s (Reagan) all yielded major growth dividends for the U.S. economy.
What's more, those past major tax cuts were to varying degrees bipartisan. Sadly, not this time. Not one Democrat voted for them. Not one.
That's why the Democrats and progressive left have become so utterly unhinged. They've failed to stop the one thing that might deny them a chance to retake both houses of Congress in the 2018 midterm elections: an economic boom.
When the economy really begins cooking, with the economy growing close to 3%, hundreds of thousands of new jobs being created and workers seeing more in their paychecks, how will they explain that to their constituents?