Democrats spreading the politics of envy
As Republicans in the U.S. Senate passed tax reform legislation last week, a dark force swelled among liberals in America.
“America died tonight,” tweeted Kurt Eichenwald of Vanity Fair, urging millennials to “move away if you can. USA is over. We killed it.”
The next morning, comedian Patton Oswalt awoke and declared, “There’s no America now,” or at least “Not the one we knew.”
Deep breath, guys.
It’s. A. Tax. Cut.
The effect of the bill that has those on the left so worked up is the mistaken idea that the Republican plan raises taxes on lower income brackets and cuts taxes for America’s wealthiest. If true, this would exacerbate “income inequality” in the U.S., requiring middle-class taxpayers to subsidize the rich.
But it’s not true. According to an analysis by the liberal Tax Policy Center, under the bill, every income group would see an increase in after-tax incomes in 2019 and 2025. As Manhattan Institute economist Brian Riedl has noted, 75% of families will see a tax decrease, and the 12% that will see an increase are clustered among higher earners. The typical middle-income family will see a tax cut of about $850 per year until the year 2027.
Those pretending the bill increases taxes on the “little guy” focus on 2027 when the tax cuts expire. They cite tables showing taxes increasing disproportionately on lower incomes in the 10th year and scream the plan is a “tax increase,” completely ignoring all the tax relief those families get in the first nine years of the plan and assuming Congress wouldn’t re-authorize the cuts in the future.
Make no mistake: If Democrats killed this plan, middle-income taxpayers would pay nearly $7,000 in higher taxes over the next decade. And yet liberals believe Republicans are the ones vacuuming your pockets.
Progressives forge ahead with misleading statistics in service of their dedication to “fairness.” The bill, they argue will exacerbate “income inequality.”
But this is simply stoking resentment among taxpayers who will be better off because someone else might better off than they are. As Margaret Thatcher famously declared, the “income gap” has two ends. Taken to its logical conclusion, progressives would be happier with a smaller wage gap if the poor were poorer and the rich not so rich. This tax plan seeks the opposite — it tries to make everyone better off, regardless of the spread between rich and poor.
In fact, it would be virtually impossible to implement a meaningful tax cut without disproportionately benefiting the people who pay the most in taxes. Currently, the top 20% of taxpayers pay 88% of all federal income taxes; the lowest 40% of earners pay no income tax at all.
Instead of vilifying rich people, progressives should be in favor of creating more of them because, without highearners, government programs would be gasping for cash.
Somewhere along the line, Americans on the left began thinking incomes were a zero-sum game; if someone was making more money, it meant they were making less. But the idea that your life would be better if someone else was worse off is antithetical to an opportunity society.