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Why Progressives Can’t Understand How the Corporate Tax Cut is Fueling Our Booming Economy Rate Topic: -----

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Posted 12 November 2018 - 10:52 PM


Why Progressives Can’t Understand How the Corporate Tax Cut is Fueling Our Booming Economy

American Thinker
By William Sullivan
November 12, 2018


George Orwell was correct: “Some ideas are so stupid that only intellectuals believe them.” The corollary, that some ideas are so obviously correct that only intellectuals disbelieve them, is equally true.

Consider these simple facts.

First, more Americans in 2018 are working than last year. In fact, as of the latest jobs report, American unemployment remains at just 3.7%, which is a 49-year-low.

Second, that larger percentage of working Americans are generally earning more income and enjoying stronger benefits today, given that “wages were 3.1% higher in September than they were a year ago,” the report shows -- the highest wage growth since 2009. Additionally, larger private employers, “in this environment… are more apt to provide competitive wages and strong benefits” to entice and retain talent, writes Dominic Rushe of The Guardian.

Finally, consider that most Americans are also withholding much less in taxes upon their wages this year than last, leaving more money in their pockets to save, or to spend on everyday goods and services. Roughly 90% of Americans saw bigger paychecks in 2018 than they did in 2017, and even left-of-left Politifact, unable to meaningfully obfuscate or refute the claim, rates that claim as “Mostly True.”

That’s all good for American workers. And this economy, by any measure, is booming.

Contrast this to the hyper-regulated economy over which Barack Obama presided, which could rightfully be described as the worst economic recovery in modern times. Obama famously told Americans that 2% growth was “the best we could hope for” in the last years of his presidency, and GDP growth was actually decelerating in his final year in office, from “2.3% in Q2, to 1.9% in Q3 to 1.8% in Q4 of 2016,” relates an Investor’s Business Daily editorial.

That simple fact firmly contradicts Obama’s 2018 campaign speeches claiming credit for this booming economy -- under Trump’s presidency and a GOP Congress, growth has averaged at 2.9%, and was 4.2% in Q2, and 3.8% in Q3 of 2018.

In short, the economy was clearly in decline by Obama’s last year in office. It was only when Trump took over with a Republican Congress in 2017 that the economy began our current boom.

It’s hard to imagine a downside to any of the aforementioned outcomes for Americans today. But the loudest and most prominent leftists imagine circumstances very different than all of that positive economic data signifies. Due to a persistent logical fallacy, maintained by blind faith alone, leading figures among the left are screaming from the ramparts that the Republican-led Tax Cuts and Jobs Act of 2017 should be a reason for Americans’ outrage. As Paul Krugman argues in a recent article at the New York Times:

Republicans lie about their agenda, pretending that their policies would help the middle and working classes when they would, in fact, do the opposite….
What Republicans stand for is cutting taxes on the rich and slashing social programs. Sure enough, last year they succeeded in ramming through huge tax cuts aimed mainly at corporations and the wealthy.

No data are introduced to support that claim. The reader is meant to blindly presume that the phantom downside of Americans enjoying an unemployment rate lower than at any time since 1969, having more money in their pockets due to smaller liability in federal taxation, and reaping the benefits of a booming economy (none of which is mentioned in Krugman’s piece, obviously) is that greedy American businesses also benefit from the tax cuts by having more money on their balance sheets. Therefore, the corporate tax cuts which help greedy and wealthy American businesses must come at the expense of American individuals.

Never does it occur to most opponents of the GOP tax cut that American individuals are largely doing better today than a year ago because American businesses are also doing better.

And it likewise never occurs to them that business owners do not pay the corporate tax, which was reduced from 35% to 21% in the GOP tax legislation, but that businesses merely tend to pass the costs of corporate taxation onward.




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