I have been following the twists and turns of the latest tax bill, and listening to the hyperbolic talking points unleashed against it by our old friends, the so-called progressives. It seems that we are all going to die! Well, I mean, of course, those of us will die who have not already been killed by Brexit, the election of Trump, the withdrawal from the Paris Climate Accord, the end of "net neutrality," and the declaration of Jerusalem as Israel's capital.
The craziness of the progressives is, once again, on display.
I wrote a long time ago (May 31, 2011) that modern democracy has turned into a battle between the voters and the taxpayers. The two groups increasingly do not overlap,
[T]he real source of the crises facing the major currencies, and, in fact, our core economic well-being . . . all comes down to a very simple and basic fact. The western nations have developed societies where those who pay for government services, in general, are not the ones benefitting from the services. In the United States, for example, we have the top one percent of earners paying 38-41% of all Federal income tax. We have nearly half of Americans who pay no income tax, and another large percentage 15-20% who pay minimal income tax (and lets not even get into "Earned Income Tax Credits".) We essentially have a society where some 25% of the income earners pay close to 90% of all Federal income taxes. That 25% does not consume anywhere near 90% of the services provided by the Feds.We have a major political party, the world's oldest, the Democrat Party, that has decided to throw its lot in with the voters and ignore the taxpayers. It's not a totally stupid short-to-medium-term policy, although ultimately it leads to Venezuela, Greece, and Detroit. The Democrat base is increasingly composed of people who do not pay income taxes or who directly benefit from those and other taxes. The Dem voters are those on the public dole (including in Virginia, felons), those who work for a variety of public or semi-public organizations (including NGOs who rely on favorable tax laws), and in fields such as academia, the law, media, entertainment, and other occupations removed from the nitty-gritty of the real and productive economy. In other words, most of them don't have to meet payrolls. They do not have to engage in make-or-break investment decisions; they live in a fantasy bubble. The Dem Party also has a curious assortment of billionaires who have made it themselves, love virtue signaling, and really don't care if others can't make it because of the policies advocated by the Dems; those who can't make it are put on the dole controlled by the Democrat Party machine. Win-win.
The GOP tax plan is hardly, despite what its most ardent supporters proclaim, a revolutionary break with the past. It does make a very useful reduction in the absurdly high corporate tax, and should encourage investment in the US and job creation. Jobs! Good! It probably put another (fatal?) bullet into Obamacare by eliminating the penalty for failure to sign up. All good. It, however, doesn't do much with the taxes paid by the wealthy, with most of them probably paying about the same as they do now, and some paying more as they find that the break they get for paying taxes to high-tax states is capped, as is interest on "super" mortgages. It did not eliminate the idiotic death tax. Full disclosure: My preliminary calculations show that I end up about the same as before, so . . ..
The GOP tax plan is most certainly not the death sentence its strident opponents pretend to believe it. That does not and will not stop the Dems from their crazy talk. That's all they have left on the left, well, that and a hope that the blight of economic ignorance will continue to spread across the Western world.