• Daniel Ethan Finneran

Trump's Tax Bill Falls Flat

December 2017


What this tax bill needs is PR—public relations. It needs salesmanship. It needs panache. It needs a little verve, zest, and brio. It needs a face, a smile, a flourish, a campaign to advertise all that makes it good. It’s like a steak—lean with just enough bleed to be enticing and toothsome. What it lacks, though, is the sizzle. And every carnivore-turned-epicure knows, a steak is just a boring hunk of muscle and sinew if not for its ever-essential sizzle. That’s all that this tax bill is right now; a slab of ungarnished, unappetizing meat.


The Trump administration has done a very poor job of dressing up this tax bill and selling it to the American people. At the time of this writing, the bill will have been law for no more than two days. It was passed, predictably, along party-lines; it received not a single vote from a Democratic representative in either the House or the Senate. This is odd, for the bill not only eases the tax burden on the corporate titan (something the Democrats are ostensibly opposed to), but on the common man as well. This is a tax cut for the nabob and the everyman alike; for he who earns at the uppermost echelon and for the man who labors far below.


Everyone benefits, I should think, when they’re able to keep more of their hard-won income in their own pockets. This isn’t some kind of reverse-Robin Hood scheme, in which the poor man’s purse is usurped for the rich man’s profit. However, the Democrats specifically and the media more generally would lead you to believe this. Congresswoman Nancy Pelosi, the House minority leader and perpetual thorn in Trump’s side, has been leading the resistance against the bill. Among other epithets, she called the bill “Armageddon” and “the GOP tax scam” and a “monumental, brazen theft from the American middle class”. She went on to say that the bill “does violence to the vision of our founders”. I think, on this point above all others, our Founding Fathers might politely disagree. If my public education serves me well, our Revolution was fought in part for less onerous and anonymous taxation, not more. We took up arms against the boorish King George’s Stamp, Sugar, Quebec, and Declaratory Acts, all so we might be a free and untrammeled people. Our Founding Fathers were cut from a cloth of enlightened self-interest, physiocrats and then market capitalists, and above all, small government enthusiasts. So much so that it took sixteen amendments and well over a century for an income tax to be written into law.


Others, notably Senators Chuck Schumer and Elizabeth Warren, echoed Congresswoman Pelosi’s wrath. They said, respectively, that the bill is “so, so bad” and that it’s now “government for sale”. Again, I fail to see how this is the case. The bill is meant to lower taxes in every socioeconomic stratum. Conceivably, everyone (save for high-earning individuals living in high-taxed states such as New York, New Jersey, and California) stand to prosper from this bill. It’s incomprehensible to think that such a bill would be ubiquitously loathed. But this seems to be the case.


Democrats appear to have succeeded in making the worse case the better. Their sophistry has effectively trickled out from D.C. and now suffuses popular opinion. Nearly 50% of Americans are opposed to this bill, even though most, if not all, will benefit from it. When compared with previous tax cuts (think of those imposed by Ronald Reagan and George W. Bush), the Trump tax cut is far less popular. Only 32% of people surveyed look favorably upon the current bill, as opposed to 51% and 49% for Reagan and Bush’s cuts respectively. Most unfathomable of all is that this bill is actually less popular than previous tax hikes. It’s less popular than Bill Clinton’s in 1993 and George H.W. Bush’s three years before. How can this be?


Look no further than the message and the messenger. Most Americans, when asked, will say this bill is a gratuitous tax break for those at the top. It’s for those who need it least. They’ll say that it injures and enfeebles the blue-collar middle-class working man and woman. The reality is, though, that those fat cats lounging in the uppermost echelons of society are not only earning the most, but paying the most in taxes. They return a disproportionate amount of their income back to the government. Assuming the figure hasn’t changed, the top 1% of income earners in America (or those earning over $465,626 per year) pay over 50% of the nation’s income tax.


So, yes—the wealthiest of American citizens will enjoy a significant tax break, but this must be viewed in proportion to the excess they’re currently made to pay. And even under this newest bill, by dint of the fact that they still earn more and that they’re still atop a progressive bracket system, they’ll continue to pay the lion’s share.


The other issue is the messenger. Could it be that this bill is so universally loathed because it has Trump’s name appended to it? Would it be any less anathematized if it were to be called the “Romney” or the “McCain” or even the “Cruz” Tax Cut? It’s difficult to say, but I have to think that the Trump brand, so exalted in other industries—from hotels to neckties to tee times—isn’t doing it any favors. He’s the least popular president in the modern era, and it’s fitting—though perhaps not just—that his agenda suffers the same fate. The bill is damaged by its namesake. This is where a personality becomes important. It’s here that one’s perception in the public’s eye becomes relevant. If Trump weren’t so divisive, reactive, and eristic, this bill would be a boon and more people would laud it.


But the president isn’t the only messenger failing to make his case. There’s also the Republican Party. Like Trump, the party hasn’t done this bill any favors. They continue to fail to convince a skeptical public that a corporate tax cut is a good and valuable thing. Like a heresy, they hesitate to even utter the phrase, let alone make and defend its case. Because while it’s true that all individual taxes will lower, and consequently all boats might rise, the most important and lasting aspect of this bill is the corporate tax rate decrease. From 35% to 21%, the drop will rouse burdened businesses from their sleep. They’ll become once again competitive in the international market, in a way they’ve not been for quite some time.


In theory, American businesses will slow down their interminable quest for tax havens abroad and look homeward instead. They’ll pull their profits from the likes of a Northern Ireland, a Bermuda, or a Cayman Island and invest in the continental U.S.A. Inversions—whereby by a company incorporates in a different country to enjoy its advantageous tax rates—might very well occur less frequently. They’ll invest in creating new technologies, improving efficiencies, and retaining employees at home by offering a better wage. And though this tax rate is still much higher than those of European nations, it’s an auspicious start.


All of this is lost, though, when the GOP can’t articulate the point. Republicans think that to promote this idea (that is, of a lowered corporate tax rate) is to immolate oneself—it’s tantamount to setting one’s political career aflame. It’s politically unpalatable. It’s a toxic topic, and voters will bristle when they hear it. Well, bristle they may, but so far as economic science is concerned—assuming you’re of the classical ilk, and not a Marxist or Mercantilist—it’s a vital idea. The marketplace, seeing neither color, class, nor creed, as Voltaire marveled upon returning to his château at Ferney from the London Stock Exchange, is a thing to be cherished and promoted, not stymied and stifled. For their own sake, and for the sake of the bill, Republicans need to make this case. It may be a dismal science, but it’s one that needs its teacher.


Professor Trump may be just the man for the job. He, with his business bona fides and acumen, should be ablest of all to teach us the way. Ironically, he’d do well to do what Franklin Delano Roosevelt did years before. FDR was famous for his “fireside chats”. Trump should get on the airwaves (Twitter, in this case) and give a chat of his own. Instead of griping about players kneeling or LiAngelo Ball stealing, use the platform to tell the American people why this is a worthwhile bill. Brand it as the boon we’ve long awaited. Teach us why competition in the international marketplace is a thing to be desired. Expel, if you can, the “heresy” that haunts businesses big and small. This, is the sizzle. And if he does these things, the bill will just about sell itself.

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Success, ‘tis said, yet more success begets– On the prosperous rains ever more profits. So reads the adage of the Gospel’s Jew: The iron law, the Effect of Matthew. “To him who has much, more will be