The Patriot Post® · Dems Look Foolish as Tax Reform Brings Prosperity
If the recent GOP tax cuts are truly “Armageddon,” as Nancy Pelosi and her socialist Democrat cohorts claim, then America’s response increasingly looks like an R.E.M. song title: “It’s The End of the World As We Know It, and I Feel Fine.”
Chicken Little Democrats claimed tax cuts — specifically cutting the corporate tax rate from 35% to 21% — would be a disaster for the American worker, but reality begs to differ. Following the passage of the GOP tax cuts, more than 200 American corporations have given or announced wage increases and bonuses of between $1,000 and $2,500 for their workers.
Walmart — the epitome of capitalistic evil to American progressives — announced it is investing a portion of its tax savings into a wage increase for employees, raising its corporate minimum wage to $11/hour, more than 52% higher than the federal minimum wage. Dozens of other corporations have announced they are expanding and creating new jobs due to the tax cuts.
Maybe nowhere are the effects of the tax cuts more noteworthy than with Apple, the proudly “liberal,” Donald Trump-hating corporation adored for its “wokeness” by idealistic progressives nationwide. Tim Cook, CEO of Apple, announced that, due to the lower corporate tax rate, Apple is repatriating $250 BILLION dollars into the U.S. economy, in the process paying a $38 billion tax bill. Additionally, Apple is handing out $2,500 in stock grants to employees, and is investing an additional $350 billion in the U.S., creating 20,000 new jobs.
This economic windfall for American workers is what Pelosi calls “pathetic,” “insignificant” and “crumbs.”
To be fair, the tax bill is a disaster for progressive Democrats, who rely on suffering and envy to stay in power. Democrats need people to be dependent on government, and the tax bill is an incredible catalyst for economic prosperity, making Americans masters of their own fate, which is horrible for Democrats.
Multiple articles this week, including one from The New York Times, dismiss any correlation between the tax cuts and the bonuses and raises. Of course, one might ask why these bonuses and raises never materialized during the Barack Obama years, and only came to pass after a year of Trump’s pro-growth, pro-business, regulation-slashing agenda.
NYT writer Jim Tankersleyjan grouses that the majority of the corporate tax savings are being invested in capital upgrades, or higher dividend payments to shareholders, rather than directly going to rank-and-file workers. Apparently, Tankersleyjan doesn’t understand that higher dividend payments increase stock values. You know who holds huge quantities of stock, and will benefit from higher stock prices? Tens of millions of American workers with 401(k) retirement accounts.
He also seems ignorant of the fact that capital investments drive increased productivity, which in turn drives higher wages. Though this process is not instantaneous, the fact that workers ultimately see the majority of the benefits from a tax cut is historically proven.
Maybe the greatest irony is that, with his last line, the author proves what every conservative has argued for decades; namely, that it is competition that drives economic gains, not redistribution. Tankersleyjan writes that workers may see wage increases coming soon, but if they do, it is “Not because companies are dying to share their tax spoils with workers. But because they have to, or those workers will take a job with another company that will.”
Yes! Exactly so!
Though envious, high-tax, socialist redistributionists constantly attack the so-called “trickle down” theory of economic growth, no such school of thought exists. That moniker was a pejorative used to attack Ronald Reagan’s supply-side economic policies, which sought to stimulate business growth through lower corporate and capital gains taxes and reduced regulation. Job and wage growth was a beneficial and predictable result.
In other words, the American worker wins either way in a low-tax environment. Even if every corporation is not a Hobby Lobby (operating on Christian principles, paying a minimum $10/hour as a moral imperative), low corporate taxes lead to business growth. Business growth drives job creation. Job creation reduces available labor, which creates competition for that labor, which drives up wages.
So even if a CEO is the most heartless, greedy jerk on Earth, in a pro-growth business climate he is forced to increase wages to compete for labor. And that is a good thing.
For the leftists who dispute this, a question: If you say higher taxes on labor and capital have no negative impact on job and wage growth, then please explain why you support huge taxes on cigarettes and sugary drinks, with the stated goal of reducing their consumption. Corporations have fixed costs, and when you raise those costs they are forced to either raise prices and lose customers, or slash costs and hire fewer workers. High taxes hurt the very people leftists claim to be helping.
History proves this empirically. Higher tax rates resulted in higher unemployment and lower tax revenues. Lower taxes led to an economic boom, with the end result that the rich paid a lower rate, but higher total taxes and a greater proportion of all taxes.
Keep that in mind the next time progressive Democrat politicians and Leftmedia talkingheads repeatedly make utter fools of themselves, like they did by claiming the average worker would see no benefits from the GOP’s tax cuts.