Alan Zendell, October 30, 2020
An unusual thing happened this morning. I received a comment to a recent post from a Trump supporter. The surprising thing was that it was rational, and more important, the commenter probably represents the views of many other voters. There are undoubtedly many thousands of people like him who are now retired, who’ve made a good deal of money in their careers, who weren’t born into wealth; they earned it.
I know several people to whom that description applies. One thing they seem to have in common is a strong aversion to paying taxes, or at least to having their taxes raised. I get that, but as we age into our twilight years, I still have to ask why. I’m talking about people who have enough resources that they will never have to worry about financial security. They have enough to buy expensive toys, travel, (when it’s safe,) and assure that their children and grandchildren never want for anything.
Consider some numbers. I’m not referring to anyone in particular, just trying to get a feel for what is involved. Suppose you’re a billionaire, and your income this year is $300 million. Assuming that you haven’t been cheating on your taxes all along, how will Biden’s promised tax policy affect you? Biden has been specific that he wants to roll back Trump’s tax cut for the very wealthy. That means restoring the highest marginal tax rate to 39.6% from 36%, an increase of 3.6%.
Assuming that you don’t have a billion dollars in losses from previous business failures and we overestimate your tax burden by applying the 39.6% rate to your entire income, you’re looking at a tax increase of ten million dollars. That’s a lot of money. For most of us it’s impossible to imagine earning that much in one year, much less paying that much more in taxes. But you’ve just received that much in the form of a tax windfall for each of the last three years, and your invested billions will be unaffected. You were getting by just fine before Trump gave you that unearned gift. Considering how many Americans are in line at food banks, have lost their jobs due to the pandemic, and now face losing their health insurance thanks to Trump’s obsession with destroying Obamacare – WHAT THE HELL ARE YOU COMPLAINING ABOUT?
The essence of the aforementioned comment was that although Trump really is as awful as I have described him for three years, Biden’s policies would be a disaster. I’m sure we could have a spirited, if polite debate about that. Putting aside the fact that we’re not economists, I cannot imagine how leveling the playing field for Americans who are willing to work hard and follow the rules can be a disaster, and I would remind my commenter friend, that that’s how he got where he is today.
John Kennedy ran for president following the economic doldrums of the 1950s proposing a massive increase in government spending, part of which had the goal of landing astronauts on the moon within a decade. That effort cost hundreds of billions of dollars, which was used to upgrade scientific research, engineering, and educational opportunities. It directly created more than a million professional and skilled trade jobs that sparked a sharp increase in our GDP and saw huge benefits for millions of Americans. Borrowing from Irish politician Sean Lemass, Kennedy assured us that “a rising tide lifts all boats.”
Biden has a similar vision. Substitute rebuilding our infrastructure and reducing our carbon footprint for landing on the moon, and it’s essentially the same argument. The other part of that equation is making American corporations pay a stiff enough penalty to manufacture their products overseas that it’s worth paying to re-open American factories. Trump has railed about China stealing American jobs but hasn’t done a thing to stop it from happening. It’s not that difficult. A Democratic majority in the House and Senate, with Biden’s leadership, need only pass a punitive re-importation tax on companies that continue to employ foreign workers over Americans. Doesn’t that sound like making America great again?
Imagine an economy with increased labor costs for corporations but better wages and benefits for American workers. The corporations will have to choose between raising prices and lowering profit margins, but fewer Americans will be in poverty, and many fewer will be unemployed and homeless. Less will be spent on welfare, food stamps, and unemployment benefits, and millions of children will be able to live well, have enough to eat, and focus on their schoolwork. No matter how much money you have, isn’t that the kind of country you want for your grandchildren? They might even inherit a habitable planet.