Five ways the media tries to convince us tax cuts are bad

To hear the media tell it, tax cuts are Bad For You and you won't like the result. Pay no attention to the fact that the cost of living is up, the government is bigger, incomes have stagnated, large corporations are no longer creating jobs, and the U.S. hasn't had a major tax cut since 1986. Somehow, we are all supposed to believe tax cuts which put more of our own money in our pockets, will make us ... miserable.

It's the most fallacious collection of up-is-down arguments ever assembled. Pity when the press doesn't have facts to go on, I suppose. And the Democrat dominance of rule-by-redistribution and subsidy is threatened. So here is a handy-dandy abbreviated guide to some of the rubbish being bandied about on the airwaves and print since they won't stop:

1. Tax cuts won't do anything for the economy

The Washington Post follows this line:

First, the bill is unlikely to generate sustain 3 percent growth, let alone 4 percent. The overwhelming expectation of economists is that there will be a "modest" pick up in growth, but it won't last long given America's aging population. Wall Street bank Goldman Sachs predicts growing soaring to nearly 3 percent for a year or two and then falling back down.

What's stupid about this argument is that economists have been consistently wrong about this claim. Anyone remember the Reagan boom? Tax cuts triggered far greater growth than economists forecast then. And you probably don't remember it, but the cognoscenti in 1979 said the Chilean Model of private social security accounts would fail, too. They didn't - they gave Chileans 7% to 9% average compounded interest over the life of workers who saved in its market-based mechanisms - and huge retirement payouts with no dependence on bankrupt government coffers. Heck, anyone remember the doomsaying that accompanied Donald Trump's election? They said the markets would take a dive there, too. And they didn't. Stocks skyrocketed enough to put Paul Krugman into a puddle of tears, or at least, make him look like an ignorant boob. Bottom line: free market policies work beyond expectations every time you try them.

2. Tax cuts will increase the deficit

CNBC likes to pursue this one:

The final Republican tax bill would expand budget deficits by more than $1.4 trillion over a decade, according to a "very preliminary" analysis by the congressional scorekeeper Joint Committee on Taxation.

It would mean the GOP plan slips under the maximum $1.5 trillion it is allowed to add to the deficit under rules set by the Senate earlier this year.

Two problems: The analysis relies on a static analysis that one dollar in your pocket is one dollar less in the government's pocket. The reality is, much of the money in consumer hands will go on to investments which in turn will create more businesses which in turn will expand the tax base, at least in states with business-creation-friendly policies such as Texas, Indiana and North Carolina. It also ignores that the government is capable of cutting costs if it's forced into it. It doesn't always have to expand and President Trump has shown a strong understanding of this issue and will probably act. Government on the whole spends cash less efficiently than individuals who know it's their own money. The other problem is that government forecasts have a long record of being wrong, starting with the Nightmare of Obamacare and how its vast spending mechanisms ballooned the deficit. The New York Times insists the analyses it cites do take into account a non-static analysis. As for that, see point one above.

3. The tax cuts aren't sufficient.

According to NBC News, the whole tax cut package is just awful because it's not big enough and not everyone will get all of it:

The new child tax credit will be $2,000, same as in the Senate bill, but a maximum of $1,400 will be refundable against payroll taxes versus $1,100 earlier. But not everyone is entitled to the full $1,400, which scales up with income.

"Ten million children in low-income working families will get nothing from the last-minute changes to the GOP tax bill's child tax credit increase — and as a result will get just a token increase of $75 or less per family," Chye-Ching Huang, director of federal tax policy at the left-leaning Center on Budget and Policy Priorities, said in an e-mail. "Another 14 million will continue to get less than the bill's full CTC increase."

First of all, the child tax refund credit, which hands out $1,400 to people who don't make enough to pay any taxes anyway, isn't a tax, a tax cut, or any sort of refund: It's redistribution, a subsidy, and from working taxpayers who pay taxes to people who work but don't make enough to pay taxes. To howl that they aren't getting enough is fallacious because they've crossed that line of paying any tax and can't get a tax cut from nothing. What they are getting, even the supposedly horrific free $75, is gravy.

4. The tax cuts benefit 'wealthy heirs.'

NBC News again, citing the reduction of the death tax and laying the baloney on thick:

The starting point for the estate tax would be doubled under the bill from the current $5.5 million for single filers.

This benefits wealthy heirs, but goes less far than the House bill, which would have eliminated the estate tax entirely. President Donald Trump's family might have saved over $1 billion on their own if that change had gone into effect.

First of all, the truly wealthy heirs have had this number for a long time now and know how to get around it. But an $11 million business passed on to heirs isn't a corporate empire, it's a small dry cleaning business, a family farm, or a plumbing contractor. The left has no idea what things cost and so imagine that these small stakeholdings built of sweat and labor are places full of idle lordlings and princelings. In reality, they are the people who can't pass on their businesses to their sons or daughters because of the punitiveness of the estate or death taxes, meaning everything they have worked to build up gets lost to the government when they die. The superrich have had tax shelters to get around this but not the smaller entrepreneurs. Now the smaller businesses get a tad of relief - and smaller businesses can become bigger businesses, hiring more people at higher wages.

5. Charities will suffer:

This one is being pushed by the New York Times as well as the Washington Post. The Times reports:

The final legislation roughly doubles the standard tax deduction, to $12,000 for individuals and $24,000 for couples. A higher standard deduction means fewer taxpayers will itemize their deductions on their tax returns, reducing the incentive to give to charities. Currently, only taxpayers who itemize — meaning, they detail gifts to charity and other spending on their returns — may deduct contributions.

The WaPo headline:

The Republican tax plan will make it more expensive to donate to your church

(As if leftists really cared about supporting churches.)

The problem here is that it assumes most charity is given by fat cats who deduct. With Christian and other faiths' doctine emphasizing charitable duties by all, there are millions who give without taking any deduction due to the amounts being too small. Maybe charities now can focus on those people instead of just a few fatcat donors and become worthy of being called charities once again. Right now, they are just tax vehicles for well-heeled NGOs who serve themselves first from the spoils. But more to the point, good economies mean lots of money to give to charity. People give to charities because they want to, not solely because of tax deductions. When the boomtimes happen, the charity cash rolls in.

The bottom line is, tax cuts are great. They put more money in your pocket. They create more jobs. They help everyone directly and indirectly. They give more choices and freedoms. They force the government to get smaller and more efficient.

In short, they make America great again. Let's roll.

 

 

 

 

To hear the media tell it, tax cuts are Bad For You and you won't like the result. Pay no attention to the fact that the cost of living is up, the government is bigger, incomes have stagnated, large corporations are no longer creating jobs, and the U.S. hasn't had a major tax cut since 1986. Somehow, we are all supposed to believe tax cuts which put more of our own money in our pockets, will make us ... miserable.

It's the most fallacious collection of up-is-down arguments ever assembled. Pity when the press doesn't have facts to go on, I suppose. And the Democrat dominance of rule-by-redistribution and subsidy is threatened. So here is a handy-dandy abbreviated guide to some of the rubbish being bandied about on the airwaves and print since they won't stop:

1. Tax cuts won't do anything for the economy

The Washington Post follows this line:

First, the bill is unlikely to generate sustain 3 percent growth, let alone 4 percent. The overwhelming expectation of economists is that there will be a "modest" pick up in growth, but it won't last long given America's aging population. Wall Street bank Goldman Sachs predicts growing soaring to nearly 3 percent for a year or two and then falling back down.

What's stupid about this argument is that economists have been consistently wrong about this claim. Anyone remember the Reagan boom? Tax cuts triggered far greater growth than economists forecast then. And you probably don't remember it, but the cognoscenti in 1979 said the Chilean Model of private social security accounts would fail, too. They didn't - they gave Chileans 7% to 9% average compounded interest over the life of workers who saved in its market-based mechanisms - and huge retirement payouts with no dependence on bankrupt government coffers. Heck, anyone remember the doomsaying that accompanied Donald Trump's election? They said the markets would take a dive there, too. And they didn't. Stocks skyrocketed enough to put Paul Krugman into a puddle of tears, or at least, make him look like an ignorant boob. Bottom line: free market policies work beyond expectations every time you try them.

2. Tax cuts will increase the deficit

CNBC likes to pursue this one:

The final Republican tax bill would expand budget deficits by more than $1.4 trillion over a decade, according to a "very preliminary" analysis by the congressional scorekeeper Joint Committee on Taxation.

It would mean the GOP plan slips under the maximum $1.5 trillion it is allowed to add to the deficit under rules set by the Senate earlier this year.

Two problems: The analysis relies on a static analysis that one dollar in your pocket is one dollar less in the government's pocket. The reality is, much of the money in consumer hands will go on to investments which in turn will create more businesses which in turn will expand the tax base, at least in states with business-creation-friendly policies such as Texas, Indiana and North Carolina. It also ignores that the government is capable of cutting costs if it's forced into it. It doesn't always have to expand and President Trump has shown a strong understanding of this issue and will probably act. Government on the whole spends cash less efficiently than individuals who know it's their own money. The other problem is that government forecasts have a long record of being wrong, starting with the Nightmare of Obamacare and how its vast spending mechanisms ballooned the deficit. The New York Times insists the analyses it cites do take into account a non-static analysis. As for that, see point one above.

3. The tax cuts aren't sufficient.

According to NBC News, the whole tax cut package is just awful because it's not big enough and not everyone will get all of it:

The new child tax credit will be $2,000, same as in the Senate bill, but a maximum of $1,400 will be refundable against payroll taxes versus $1,100 earlier. But not everyone is entitled to the full $1,400, which scales up with income.

"Ten million children in low-income working families will get nothing from the last-minute changes to the GOP tax bill's child tax credit increase — and as a result will get just a token increase of $75 or less per family," Chye-Ching Huang, director of federal tax policy at the left-leaning Center on Budget and Policy Priorities, said in an e-mail. "Another 14 million will continue to get less than the bill's full CTC increase."

First of all, the child tax refund credit, which hands out $1,400 to people who don't make enough to pay any taxes anyway, isn't a tax, a tax cut, or any sort of refund: It's redistribution, a subsidy, and from working taxpayers who pay taxes to people who work but don't make enough to pay taxes. To howl that they aren't getting enough is fallacious because they've crossed that line of paying any tax and can't get a tax cut from nothing. What they are getting, even the supposedly horrific free $75, is gravy.

4. The tax cuts benefit 'wealthy heirs.'

NBC News again, citing the reduction of the death tax and laying the baloney on thick:

The starting point for the estate tax would be doubled under the bill from the current $5.5 million for single filers.

This benefits wealthy heirs, but goes less far than the House bill, which would have eliminated the estate tax entirely. President Donald Trump's family might have saved over $1 billion on their own if that change had gone into effect.

First of all, the truly wealthy heirs have had this number for a long time now and know how to get around it. But an $11 million business passed on to heirs isn't a corporate empire, it's a small dry cleaning business, a family farm, or a plumbing contractor. The left has no idea what things cost and so imagine that these small stakeholdings built of sweat and labor are places full of idle lordlings and princelings. In reality, they are the people who can't pass on their businesses to their sons or daughters because of the punitiveness of the estate or death taxes, meaning everything they have worked to build up gets lost to the government when they die. The superrich have had tax shelters to get around this but not the smaller entrepreneurs. Now the smaller businesses get a tad of relief - and smaller businesses can become bigger businesses, hiring more people at higher wages.

5. Charities will suffer:

This one is being pushed by the New York Times as well as the Washington Post. The Times reports:

The final legislation roughly doubles the standard tax deduction, to $12,000 for individuals and $24,000 for couples. A higher standard deduction means fewer taxpayers will itemize their deductions on their tax returns, reducing the incentive to give to charities. Currently, only taxpayers who itemize — meaning, they detail gifts to charity and other spending on their returns — may deduct contributions.

The WaPo headline:

The Republican tax plan will make it more expensive to donate to your church

(As if leftists really cared about supporting churches.)

The problem here is that it assumes most charity is given by fat cats who deduct. With Christian and other faiths' doctine emphasizing charitable duties by all, there are millions who give without taking any deduction due to the amounts being too small. Maybe charities now can focus on those people instead of just a few fatcat donors and become worthy of being called charities once again. Right now, they are just tax vehicles for well-heeled NGOs who serve themselves first from the spoils. But more to the point, good economies mean lots of money to give to charity. People give to charities because they want to, not solely because of tax deductions. When the boomtimes happen, the charity cash rolls in.

The bottom line is, tax cuts are great. They put more money in your pocket. They create more jobs. They help everyone directly and indirectly. They give more choices and freedoms. They force the government to get smaller and more efficient.

In short, they make America great again. Let's roll.