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Anti-Trump Tax Plan Critics Spout Fake Economics

Anti-Trump Tax Plan Critics Spout Fake Economics

By    |   Monday, 08 May 2017 12:09 PM

The PBS News Hour transcript is headlined by “An argument for how Trump’s tax plan could exacerbate inequality.”

In this interview, William Brangham got the anti-Trump tax plan views of Jared Bernstein, an economist who served in the Obama administration, and now a fellow at the Center on Budget and Policy Priorities.

Mr. Bernstein thinks that tax cuts do not pay for themselves, the growth effects tend to be small, and the Trump plan exacerbates after-tax inequality.

Erik Sherman writes in Forbes Magazine “Trump’s Tax Plan Is Even More Dangerous Than It Sounded.” 

He notes that the Trump plan will result in a massive giveaway for business owners and the top 1% since owner-operated companies will be able to avoid being taxed twice on the same revenue as they are now.

Charles Ballard writing for The Hill tells us that the Trump policies will intensify income inequality. His point being that the increase in wealth of the affluent 1% of a trillion dollars since the 1970s was the result of the redistribution of income. Which, in his view, is what caused the recent economic turndown.

President Barack Obama said at a State of the Union Address that income inequality is “the defining challenge of our time.”

After eight years of experience, we have learned that any economic proposition touted by the former president is most assuredly wrong.

What’s the right economics?

As Janet Yellen observed in a speech a few years ago, inequality of income and wealth will occur even with completely equal opportunity because of variations in effort, skill, and luck will produce variations of outcomes.

Some people take advantage of the incentives available to them to work hard, get an education, save, invest, and undertake risk. The others do not. 

The problem is not that income and wealth, vary but that there is poverty. 

The fact that Warren Buffett, Bill Gates, or Mark Zuckerberg among many other made piles of money, the economic reality is that none of their good fortunes can about by taking money from the poor.

Ever since President Lyndon Johnson’s War on Poverty in the 1960s, the United States has spent trillions of dollars on welfare programs to alleviate poverty.

What do we have to show for it?

Millions of people dependent on welfare; over half the children in the United States are raised in single-parent homes; in the black community illegitimacy, has gone from about 20% to somewhere around 70%. 

Errant and disastrous governmental policies are the predominant factors causing the intergenerational cycle of pregnancy and poverty. 

These vast spending programs justified under the guise of economic egalitarianism (as elaborated upon by Harry Frankfort in his essay “inequality.”) arguably repress the very liberties that are indispensable to a free society and a free-market economy.

What is important in America is that everyone has enough. Everyone does not have to be financially equal.

In a free society, it is inevitable that there will be inequalities of income and wealth.

If nothing else, people are in different circumstances, have diverse opportunities, and have different ideas of what it is that is important to them. 

But whatever those are individual, everyone ultimately wants in their lives a sense of fulfillment and respect.

As Harry Frankfurt said, “If a person has enough resources to provide the satisfaction of his needs and his interests, his resources are then entirely adequate; their adequacy does not depend also on the magnitude of the resources that other people possess.”

The fact that poverty is undesirable is no reason to impose economic policies requiring the forced redistribution of income from some to achieve economic equivalency for others.

That is nothing but fake economics.

Denis Kleinfeld is known as a strategic tax and wealth protection lawyer, widely published author and creative teacher.

  

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The PBS News Hour transcript is headlined by "An argument for how Trump's tax plan could exacerbate inequality.
Anti, Trump, Tax, Plan, Fake, Economics
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2017-09-08
Monday, 08 May 2017 12:09 PM
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