The ‘end of the world’ apparently comes with a bump in pay
By Michael Schaus
This article orginally appeared in the Nevada Business Magazine.
One wouldn’t know it listening to many media loudmouths, but the recently passed GOP tax reform bill is producing results that should earn the applause of “progressives.”
Unfortunately, as is now par for the course, political tribalism — not legitimate policy concerns — has encouraged the political left to protest a tax plan that’s poised to benefit every income bracket and over 85 percent of Americans.
The political theater got really out of hand shortly before the House passed its version of the bill. That’s when House Minority Leader Nancy Pelosi (D-California) went so far as to warn the reform would “literally” represent “the end of the world.”
Progressive opponents of the tax plan are outraged that corporations and the wealthy might be able to keep a little more of the money they earn. Never-mind that the rest of us will enjoy proportionately larger cuts to our taxes than will the top “one percent.”
But what about those social and economic goals progressives have been claiming as their priorities?
United States Senator Bernie Sanders — the poster boy for modern day progressivism — says one of the greatest “moral issues of our time” is so-called “income inequality.”
Concern over income inequality is nothing new. For a century, it’s driven America’s tax code — under which the wealthy face substantially higher tax rates than do middle– and low–income earners.
Well, “good news” for fans of this soak-the-rich form of taxation: The GOP tax plan actually makes the code more progressive than before.
In fact, of the roughly 5 percent of Americans likely to face higher tax burdens under the GOP reform, the vast majority will be wealthy residents of highly “progressive” blue states like California and New York.
The increase these wealthy individuals now face reflects a reduction in the amount of local and state taxes they can henceforth deduct from their federal taxes. Which means that folks with many assets, living in high-tax states, will see their federal tax bills rise.
Far from applauding the increased tax burden on the rich, however, progressive leaders in these blue states are now panicked that their wealthy liberal constituents might flee to low-tax states — such as Nevada.
Apparently, soaking the rich is only a good thing so long as it doesn’t impact left-leaning liberals in California or Washington D.C. suburbs.
In addition to increasing the tax burden on high-income earners in high-income states, progressive priorities registered other “wins,” as well.
Just hours after the bill was passed, some of the nation’s largest employers began announcing bonuses, wage increases and new investments in their workforce.
Two of America’s largest banks, Fifth Third Bancorp and Wells Fargo, even announced they’d use their tax savings to raise the minimum wage to a lofty $15 per hour — a development that received a deafening silence from the recent “Fight for 15” minimum–wage crusaders.
And these aren’t isolated incidents. By mid-January, thanks to the reform, over two million Americans saw bonuses and wage increases, with countless more taxpayers lining up to benefit.
Simple economic growth, spurred by lowering tax rates, will likely raise the wages of more workers in 2018 than job-killing government mandates have been able to accomplish in years.
Minimum–wage activists should be thrilled: Higher wages are arriving as a result of organic economic growth, rather than government diktats.
Or is that, perhaps, why progressives don’t like it: They aren’t controlling it.
Progressives like to credit the now-famous Obama-era “stimulus” — a nearly one–trillion–dollar spending-spree directed mostly at politically-connected firms and industries in 2009 — for staving off a possible depression.
The thought was, government could inject tax dollars into the economy and thus produce a thriving business climate that would create jobs, increase domestic investment and raise wages.
Of course, it didn’t work.
The GOP tax plan, by comparison, is already accomplishing the goals previous “stimulus” packages set out to achieve, simply by allowing more people to keep more of the money they earn.
Political tribalism, however, keeps the political left fighting for their old-world fantasy of a centrally planned economy — even if it means condemning a tax plan that benefits the vast majority of American taxpayers.
Despite the outrage from the “progressive” left, however, the tax reform is now law and the “end of the world” is, supposedly, upon us.
Thankfully, the apocalypse comes with bump in pay.