There is a particular depth of disingenuous detachment when listening to “Establishment Republicans” discuss the Donald Trump tax proposal today.
Especially when we see a pundit like George Will espousing “a profound moral hazard” within a tax proposal that removes federal tax liability from those earning less than $25,000/year.
Before giving an accurate history of the issue, please watch the 30 seconds of this video. Here is George Will on Monday. The video is prompted to 36:15 where he opines:
https://youtu.be/wSeG-oYjPMo?t=39m15s
Ah, what a short memory, and insufferable disconnect, these “establishment” types carry.
However, the narrow-minded, and profoundly convenient history-rewriting is not limited to the professionally disingenuous.
So, Trump wants to INCREASE the number of people who pay no taxes? That's ridiculous.
— Dan Joseph (@DanJoseph365) September 29, 2015
Apparently we have a new generation of The Professionally Republican who were never boots-on-the-ground, when we were trying to get the GOPe to understand the unintended, but predictable outcome of Bush’s fiscal policy back in 2004/2005.
Before continuing, it should be stated that I have personally defended George W Bush for the 2002 “Bush Tax Cuts“, I still do. However, just because an idea was necessary at the time, does not mean the actual implementation of the program was correct.
This is where those of us who were in the fight in 2004 were right, and the Republicans were inherently wrong. The rates should have been reversed immediately after Bush’s re-election in 2005 ! (As we were begging them to do)
The current 2015 tax system is a result of decisions made post-9/11/01 attacks, and the subsequent economic recession.
In response to an absolute plummet in economic activity after 9/11 George W Bush’s economic team cut tax rates to urgently stimulate economic activity. Again, as previously stated, this was absolutely needed.
However, that said, it was also absolutely needed to remove the tax cuts when the economy went into hyper-drive in 2003, and 2004. By Fiscal Year 2005 the tax cuts should have been removed. They were not.
The ’02 tax cuts lowered the rates of low income wage-earners by 50%. So severe was the tax cut on the lower margins that between 70 and 80%+ of the tax revenue shift was within those lower margin cuts. As a consequence, what George Will references is exactly the outcome, by 2010 47% of all wage earners had ZERO federal income tax liability.
The Bush Cuts were unsustainable – EVERYONE KNEW THIS – that is why they were scheduled to sunset 10 years later during fiscal year 2012; hence the sequester battle.
Back in ’04 (election year) and ’05 (pre mid-term), many of us, the conservative minority, were warning the Republicans in control of the House/Senate that they needed to eliminate the tax rates sooner. The window of opportunity was very small.
We foresaw a pending storm of Democrats taking over the House in 06′ mid-terms, and increasing spending. Democrats always increase spending.
This is exactly what happened when the Blue Dog democrat coalition delivered a resounding defeat to republicans in Congress ’06; Nancy Pelosi took control as speaker of the House. January 3rd, 2007 was also the day that Barney Frank took over the House Financial Services Committee and Chris Dodd took over the Senate Banking Committee. The economic meltdown that happened 15 months later was in what part of the economy? BANKING AND FINANCIAL SERVICES !
Democrats dumped 5-6 TRILLION Dollars of toxic loans on the economy from Fannie Mae and Freddie Mac FIASCOS! (By the way: Bush asked Congress 17 TIMES to stop Fannie & Freddie – starting in 2001 because it was financially risky for the US economy).
We would never again have a budget signed into law. The republican defeat was expanded in the ’08 presidential election with even more losses.
We, the original Tea-Partiers, predictably knew if the rates on the lower income earners were not re-instituted before Republicans lost the House and Senate (’06) the rates would forever be lost. How was anyone going to politically campaign around any tax proposal to “raise taxes on the poor”? It was never going to happen.
This “unintended”(?) consequence was the original ‘tax-the-rich‘ scheme. Ironically, it was put in place by Republicans, who to this day are accused of favoring the rich.
Obviously, the expiration of the tax rates came front and center in the 2012 election cycle when the Bush cuts were going to expire. The Democrats nailed, then blackmailed, Republicans over a willingness to allow the lower income earners to lose their “cuts”. It was another Presidential election year and too toxic an issue for Republicans to tackle.
As we predicted 7 years earlier (2005), the Democrats framed Republicans into a “tax the poor” lose/lose scenario in 2012. The rates would never be raised, because of political inability, on the bottom wage earners.
The professionally republican leadership created this mess, and now the professionally republican types, like George Will, are complaining about it.
So now they bitch about Donald Trump not tackling the problem they created. Why should he? It’s a losing argument politically. Trump, a rich and successful businessman, cannot possibly win the White House while arguing for a “tax the poor” program of any kind.
However, if he gets into office, he can establish the groundwork to undo this 14 year long mess the Republicans created and the Democrats exploited.
So when we see this insufferable narrative, ie Trump’s plan not taxing 50% of income earners, it’s time for us to tell the short-sighted fiscal types to take a seat. Those are the same people who got us into this mess, now the grown-ups will get us out of it.
It is impossible, both politically and realistically, to remove the costly welfare and subsidy programs instituted by Democrats, and exploded under Obama, until we expand the U.S. economy to cover for simultaneous program cuts.
Yes, this is harder, much harder, than just cutting programs outright and broadening the tax base. However, it is the only politically viable way of achieving success – unless you want to institute a permanent Democrat majority.
So forgive my blunt-speak targeted toward those who were not standing shoulder to shoulder with us a decade ago. But we carry a decade of frustration due in no small measure to the insufferable stupidity of the professionally republican. So:..
….shut-the-heck-up and take a seat.
Sit back and watch what can happen when a team of experts takes control of this economic engine and brings it roaring back to life !!
