It was astonishing to hear that, after neglecting the Ship of State for a solid week for debate “training,” Joe Biden failed at both execution and plan. The plan included repeating his stock lies, including:
– The “very fine people” hoax that Snopes finally debunked just this week
– The “losers and suckers” lie that even John Bolton had denied
The electorate does not know for sure who is telling the truth and who is lying — especially when CNN, following Alinsky (“Look in the mirror and call your enemy the worst thing you see”), blogs the debate punctuated with “Facts matter”. The electorate especially does not know for sure what economic policies will be successful and which will backfire. Luckily, they can sniff out character — vitality versus dotage.
But there is one chronic Biden lie that every Grok reader ought to learn to rebut: that Trump “cut taxes for billionaires.”
We want to thank Spike for this Contribution – Please direct yours to Steve@GraniteGrok.com.
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1. “Billionaire” and so on are measures of wealth. What we tax is income; the government takes a portion of each year’s new production. We are lucky that government doesn’t try to tax wealth. Wealth would flee the US, at the speed of mouse clicks, in search of safety, and there would quickly be no capital to build buildings, create jobs, and buy machines to improve productivity, which is the only systemwide way that pay goes up.
2. Trump’s signature Tax Cut and Jobs Act of 2017 did indeed cut tax rates on high-earners. This is because it cut tax rates on everyone. High-earners pay the lion’s share of US income taxes — and they paid a GREATER share after the Act lowered their rates. There is no way to pass a general tax cut without also benefitting “people who don’t need it.” The only individuals who did not benefit are high-earners in Democrat states who pay high state and local taxes and lost their ability to recoup some of them on Form 1040.
3. US income-tax revenue, even adjusted for inflation, is so much larger than before the Act that by now the Act clearly “paid for itself.” Most cuts in tax rates do pay for themselves, whenever we get a President wise enough to propose them (JFK and Reagan), because most rates are still on the far edge of the Laffer Curve, where the main effect of a rate increase is not more government revenue but serious harm to the economy resulting in less revenue. This will not undo Congress’s rule that any future tax-rate cut must be accompanied by new damage in order to “pay for it,” based on the false assumption that people don’t change their behavior when you repeal punishing taxes.
4. Biden’s lie to the contrary is stock demagoguery, which unfortunately continues to work well, many voters believing that they will benefit if government confines itself to harming classes of people we dislike. It is a variation on Obama’s and Clinton’s theme that certain classes “won’t see a dime of new taxes.” In fact, everyone will pay them, and it would be much more healthy if we did see them!
5. Biden’s drumbeat that “the rich [sic] don’t pay their fair share” is blind to history. The Tax Code has clawbacks of tax breaks, arcane rules for specific groups of taxpayers, and a complete second income tax (the 26%-28% Alternative Minimum Tax) to target people supposedly paying too little under the first one. Obamacare included a burdensome investor surtax (the 3.8% NIIT) having nothing to do with health care but only Obama’s own class hatred. He even proposed what was essentially a third tax system to “catch” those people we all hate but didn’t catch with the second one. In fact, every law-abiding taxpayer is paying his fair share. Some pay low taxes because they do what Congress has asked them to do, such as invest in depressed zones or buy low-interest government bonds. They have earned their low tax rate. Some, like Warren Buffett, pay low taxes by deferring the sale of stock; they have low tax on income because they have foregone their income. Of course, Biden, Sanders, and Warren are proposing to tax even gains that you don’t receive. This is a variation on the belief of “Gollum” that, if I can conceive of it, it should be mine.
6. There is no measurement of when a high-income taxpayer has paid what Biden thinks is his “fair share.” That is, if Biden got everything he is asking for, he could and would continue to use this line and demand a further solution to this supposed problem. The result is unconstrained government; this is a much bigger problem than the notion that someone made “too much money.”
The biggest positive of the Biden term is his inability to repeal the 2017 tax law, and it is the reason the US economy is resisting recession even as Biden continually wages war with investment, innovation, and entire industries. However, Republicans had to lower the “cost” of the Act to avoid a Democrat filibuster, so the personal tax cuts expire at the end of 2025 — and Biden has vowed that they will “stay expired” if he is re-elected. No matter the damage.
My perennial tax proposal is that, at the start of the next year, the US enact a law that any money you make for the rest of that year, above the amount you made this year, is taxed at a rate of 0%. No one loses. Take a moment to imagine how hard you would work! Everyone else would too. Explosive new productivity is worth whatever it would “cost” the Parasite Sector.