Lessons Never Learned by Advocates of Socialism

© David Burton 2024

     At the close of 2025, many of the sweeping Trump tax breaks established by the Tax Cuts and Jobs Act (TCJA) of 2017 will expire. While the legislation made some tax cuts to corporate profit permanent, lowered individual tax rates will expire on 31 December 2025, and revert to pre-TCJA levels.

     Depending on which party wins the White House and Congress in the 2024 elections, changes to the tax code are coming. Whether the 2017 tax cuts can be kept by the Republicans, rates rewritten by the Democrats or a divided government can agree on some sort of bipartisan compromise, all taxpayers will be affected. Allowing the non-permanent provisions of the TCJA to expire could be catastrophic to our overall economy and the well-being of many working families.

     Does anyone remember the “Laffer Curve”? It was originated by Dr. Arthur Laffer. In 2021, Dr. Laffer wrote an article concerning the persistent efforts of those antediluvian progressive Democrats who keep trying to foist the “blessings” of socialism and Marxism on America.

     Dr. Arthur Betz Laffer was born on 14 August 1940. He is an American economist and author who first gained prominence during the Ronald Reagan administration as a member of Reagan's Economic Policy Advisory Board (1981–89). Laffer is best known for the Laffer curve, an illustration of the concept that there exists some tax rate between 0% and 100% that will result in maximum tax revenue for government. In certain circumstances, this would allow governments to cut taxes, and simultaneously increase revenue and economic growth.
     Laffer was the first to hold the title of Chief Economist at the Office of Management and Budget (OMB) under George Shultz from October 1970 to July 1972. During the years 1972 to 1977, Laffer was a consultant to Secretary of the Treasury William Simon, Secretary of Defense Donald Rumsfeld and Secretary of the Treasury George Shultz.
     More recently, Laffer was an economic advisor to Donald Trump's 2016 presidential campaign. On 19 June 2019, President Donald Trump awarded Laffer with the Presidential Medal of Freedom for his contributions in the field of economics. [1]

     Now, allow me to present another article, written in 2021, by Dr. Laffer concerning wealth redistribution as advocated by our Marxist- and socialist-leaning progressives and Democrats in Washington.

     “U.S. debt rising from 79% of GDP to 123% of GDP, as it has since just before the beginning of the pandemic, from the end of 2019 to the present counting the now $3.5 trillion all but certain new spending bill plus unspent funds from previous bills, is a first for America. This debt increase represents a massive redistribution of U.S. income pure and simple. People who don’t work get paid, companies who borrow get their debts forgiven tax-free, and government beneficence distributed to one and all are all part of the so-called stimulus funds.
     “The taking of income from someone who earns a little bit more and then giving those proceeds to someone who earns a little bit less — which is the essence of income redistribution — has significant and permanent impact on U.S. prosperity. And those consequences aren’t dependent on whether you’re a rich or poor American, or on your race, age, gender or whether you’re a Ph.D. economist or an average Joe. It’s math, not opinion. Economics is all about incentives.
     “Taking income from people who earn more reduces their incentives to earn income and they will produce and earn less. Likewise, giving the proceeds to people who earn less also reduces those peoples’ incentives to earn, given that they now have an alternative source of income other than working. In both cases — higher or lower incomes — transfers reduce total production, period! Quite simply, if you tax people who work and pay people who don’t work, you shouldn’t be surprised if fewer people work! In the extreme, if a country decided that everyone, in the name of fairness, should end up with the same amount of spending power i.e., everyone earns the exact same after all taxes and subsidies, then there will be no income.
     “To guarantee perfect income equality, people who earn above the average income would have to be taxed 100% of their excess earnings while people who earn less than the average income would have to be subsidized 100% up to the average income. In other words, no matter what your earnings are before tax, your take-home pay won’t change. You wouldn’t work, nor would anyone else. GDP would fall to zero. This is the precise reason why the economy, following the “W” stimulus spending and Obama’s stimulus spending, never had even one year’s growth above 3% for 10 years. Ouch!
     “We are in for one helluva bad future with what we’ve already done. My guess is that the U.S. role in the world economy is in for one heckuva diminution.
     “Lastly, don’t believe for a moment that taking from the rich and giving to the poor helps the poor. It doesn’t. Under periods of economic stress and hardships the rich can get along a lot better than the poor, and in times of prosperity, the poor are major beneficiaries. The rich have the resources, the focus and the political connections to cushion their decline. The poor on the other hand need jobs and opportunities only provided by a vibrant economy to do well. The only way the disadvantaged can remain employed and earning income is if there are so many open jobs that they must be hired.
     “The lure of redistribution by taking from the rich and giving to the poor is an illusion. With redistribution, it’s true that the rich also get poorer but so do the poor. Revolutions have always been fought to alter the distribution of income and have invariably failed in that endeavor. Where they have been successful is that they have invariably been accompanied by much lower incomes for all by reducing incentives to produce income. [Emphasis mine] Redistribution, like smoking, is virtually impossible to reverse once you’re addicted.” (Ref. 2)

     So who are those stupid enough to keep trying to foist the “blessings” of socialism and Marxism on America? One source claims that these advocates of Socialism and Marxism come in four general flavors:

“1. The Envious. They want what achievers have, less the effort. They see the lifestyles they want to live, but do not want to put the time, effort, or personal investment necessary to create those lifestyles. They want assets (houses or apartments, cars, phones, computers, etc.) that others saved for—right now. They see what their parents took decades to achieve, with step-by-step incremental improvement, today. No waiting. It’s their right. Or something.

“2. The Underemployed. This includes those with student loan debt that far exceeds what their career field pays to support. If you got a degree at (borrowed) $50K/year to work a job that pays $25K/year, that is a tough economic reality for the next 10 years or so. These folks want student loans forgiven (taxpayer paid), even though the taxpayer did not take out the loans, choose the major, choose the school, or benefit from the education. This also includes those that were convinced they could be artists, poets, song writers, singers, dancers, whatever, but they found out there is little market for their brand of art. (If their art was in demand, they leave this group, because they can afford the student loan payments). These are also the folks that want others to pay for their health care insurance, because it is expensive.

“3. The Underachievers. These are the folks that coast. Hard work, dedication to a job or company over time, and self-improvement are for others, not them. Unlike The Envious, who are materialistic but lazy, this group doesn’t need much, but still want others to provide it. They are more than happy to subsist on whatever Welfare programs are available, so long as ‘work’ isn’t involved. This group is also the most likely to bitch that their unearned income is just too low, man.

“4. The Power Brokers. This group assumes that in the Socialistic world, they will be the upper crust, the policy-makers, not the downtrodden, overworked, drones necessary to keep their economy afloat. They understand that for some to receive a service without paying, others need to pay and not receive that service. They just see themselves on the receiving end. Why they see themselves in this envious role is unclear, as they are generally underperformers in any economic arrangement, so why would they be promoted and rewarded under Socialism?” (Ref. 3)

     Our Liberal and Progressive Democrats either lie or have no comprehension of basic economics when they continue to claim that they can pay for all their socialistic giveaways by taxing the rich. As the year 2022 began, they continued to kick around various spending proposals that could end up costing taxpayers as much as $5.4 trillion over the next decade, even without which the country is set to run a budget deficit right around $3 trillion for the second consecutive year. To justify this extraordinary fiscal expansion, they have continued to point fingers at a familiar scapegoat - the wealthy - claiming America’s budget woes would evaporate should they simply pay their “fair share.” But the latest data on federal revenues clearly puts the lie to this claim.
     Budget data from the nonpartisan Congressional Budget Office estimated federal revenues for the 2021 fiscal year would exceed $4 trillion, an 18% increase relative to the previous year. Though total federal revenues decreased somewhat last year due to the pandemic, dropping from $3.46 trillion in FY 2019 to $3.42 trillion in FY 2020, this year’s increase more than makes up for that decline.
     Fact: the revenue increase is driven largely by taxes paid overwhelmingly by the wealthy. Fact: 97.4% of the 2021 revenue increase comes from corporate taxes and individual income taxes. Fact: Individual income taxes, in particular, are skewed overwhelmingly toward the wealthy, with the top 1% shouldering just over 40% of the income tax burden. Meanwhile, the major federal revenue source that is structured less progressively, the payroll tax, actually saw a $2 billion decline in receipts compared to FY 2020.
     Those figures contradict the Democrats’ progressive claim that the only thing standing in the way of their agenda is a tax code that doesn’t adequately tax the wealthy. For years, Democrats have blamed the 2017 Tax Cuts and Jobs Act (TCJA) for cutting individual income tax and corporate tax rates. But even fresh off a recovery from a global pandemic-induced recession, this latest data shows that revenues from those areas of the tax code remain sizable indeed. Corporate income tax revenues are right around the level the CBO was forecasting for this year prior to the passage of the TCJA, and individual income tax revenues are even higher.
     These facts should make taxpayers highly skeptical of Democratic proposals to track down a supposedly enormous amount of tax revenue currently going unpaid, known as the “tax gap.” President Joe Biden has claimed that the tax gap is many times larger than the IRS says it is, going on to say that his agenda can be paid for if only the tax cheats could be hunted down. Biden’s and the Progressive Democratics’ unsupported claims of an enormous tax gap were always suspect, and now they are even more so.
     This obfuscation is all meant to cover a simple truth - Progressives can’t come close to funding their expensive, expansive agenda off the backs of the rich. Though estimates of the wealth held by America’s richest denizens can appear staggering, it represents little more than grocery money to the enormous money churn that is the federal government.
     It’s good to see tax revenues increasing. But Americans should take care to note the lesson being presented here: Taxing the rich won’t help us dig out of the fiscal hole Progressives want to put us in. This is one of the primary facts which the advocates of socialism will never admit has historically been the case and which, today, continues to hold true.[4]

     Once more, in this presidential election year of 2024, A group of progressive lawmakers is renewing a push to raise taxes on the wealthiest Americans and generate trillions of dollars – with an eye toward paying for national programs.
     The proposal, reintroduced in March of 2024, would implement a 2% tax on households worth $50 million to $1 billion and a 3% tax on households worth more than $1 billion.
     It would affect the wealthiest 100,000 households in the country – around 0.05% of the population – according to Sen. Elizabeth Warren, D-Mass., who's sponsoring the bill in the Senate. The Wharton Budget Model at the University of Pennsylvania estimated the proposal would generate $2.7 trillion over the next decade.
     It also includes multiple provisions to prevent people from dodging the tax, including $100 billion to the Internal Revenue Service's auditing efforts. The push also includes a 40% "exit tax" on people worth more than $50 million if they choose to dump their citizenship to avoid paying.
     Warren's bill is supported by five other Democratic senators, 27 Democratic House lawmakers, and Sen. Bernie Sanders, I-Vt. It's led in the House by Progressive Caucus Chair Pramila Jayapal, D-Wash., and Rep. Brendan Boyle, D-Pa. SURPRISE: The supporters of the bill are all Democrats! Well, Bernie Sanders says he’s Independent.
     The legislation has little chance of passing through the GOP-controlled House. But it reflects a persistent effort among Democrats to force wealthy people to pay more for the government programs and reduce the widening gap between the richest Americans and everybody else.
     During his State of the Union address, President Joe Biden once again pledged to raise taxes on the wealthy and large companies. His budget proposal released in March of 2024 included a 25% tax on the top 0.01% of Americans, which covers those with wealth of more than $100 million.
     Biden's plan would also reverse the corporate tax rate cut put in place under former President Donald Trump, in addition to increasing the minimum tax on the largest corporations from 15% to 21%.
     "As President Biden says: no one thinks it’s fair that Jeff Bezos gets enough tax loopholes that he pays at a lower rate than a public school teacher," Warren said in a statement to USA TODAY. "All my bill is asking is that when you make it big, bigger than $50 million dollars, then on that next dollar, you pitch in two cents, so everyone else can have a chance."
     Warren's bill – dubbed the "Ultra-Millionaire Tax Act" – was first introduced in 2019 and became a major part of her 2020 bid to be the Democratic presidential nominee. The idea proved popular: Nearly 70% of likely voters said they supported it in a 2021 poll from left-wing think tank Data for Progress. Sixty-three percent of Americans said they approved of the idea in a 2019 survey from The New York Times.
     Biden didn't pursue Warren's idea when he got into office, but he did throw his weight behind the idea of redistributing the tax burden. For example, the Inflation Reduction Act, passed in 2022 included a 15% minimum tax on corporations.
     Notably, Biden also unsuccessfully proposed a corporate tax rate hike from 21 to 28% in 2021 – when Democrats controlled both the House and Senate.
     Republicans have usually opposed such proposals, arguing that increased tax burdens on businesses would hurt the economy and, by extension, average Americans. The Wharton Budget Model estimated Warren's proposal would reduce GDP by 1.2%, and concerns about America dipping into a recession have flared in recent years.
     Many of the tax cuts passed through the 2017 Trump-supported tax bill are set to expire at the end of 2025, meaning the next president will have to determine what happens to an estimated $4 trillion worth of tax cuts.[5]

     No issue defines the diametrically opposite economic philosophies of the 2024 presidential candidates, Joe Biden and Donald Trump, than their position on the Trump tax cuts of 2017. Trump wants to make those tax cuts permanent; Biden has repeatedly promised to tax America back to prosperity by repealing the Tax Cuts and Jobs Act. But there are so many factual errors swirling around regarding the Trump tax cuts that it’s a wonder that the “truth screeners” on the internet haven’t flagged this all as “disinformation.”
     Using official government data, here’s how, after five years, the Trump tax cuts have impacted jobs, the economy, tax fairness and the simplicity of the tax code.

1. The Trump tax law was one of the biggest middle-class tax cuts in U.S. history. The Trump Treasury Department calculated that the average family of four saves roughly $2,000 a year. This means that repealing the Trump tax cut would raise taxes for most families making less than $400,000. The House Budget Committee has estimated that the typical family will pay $1,500 more taxes annually if Biden repeals the Trump tax cut.
2. The Trump tax cuts vastly simplified the tax code for the majority of Americans. A major feature of the Trump bill was to double the standard deduction from $12,500 to $25,000. As a result, prior to the Trump tax cuts, about one-third of tax filers had to itemize their deductions and keep track for the IRS of shoe boxes of receipts and other transactions related to mortgage payments, charitable deductions, interest payments and so on. Now nearly 90% of Americans — and almost all middle-and lower-income families — just check a box of the standard deduction.
3. The Trump tax bill forces millionaires and billionaires in blue states to pay their fair share of taxes. One of the smartest features of the Trump bill was to cap the deduction of state and local taxes for the super-rich.
4. The Trump tax cut expanded the economy and business activity, which ended up RAISING tax revenues. A study by Heritage Foundation fiscal analyst Preston Brashers examined the impact of the Trump tax cuts after four years and found that the policy changes actually raised MORE revenue in its first four years than the Congressional Budget Office predicted without the tax cut. The House Budget Committee similarly concluded in a May 2024 analysis that: “The Trump tax cuts resulted in economic growth that was a full percentage point above CBO’s forecast.” Revenues were $200 billion a year MORE than was predicted before the tax cuts.
5. The rich paid more, not less taxes after the Trump tax cut. Biden says continually that the major reason the deficit has exploded is that Trump cut taxes on the rich. Biden is Wrong! Five years after the Trump tax cuts, the IRS’ own data show the top 1% of earners in America saw their percentage of total income taxes collected rise from 40% to 46% of the total in 2022. This was the LARGEST share of taxes paid by the rich EVER.

1. Arthur Laffer, Wikipedia, Accessed 25 August 2021.
2. Spending spree is income redistribution – and it won’t work, Dr. Arthur B. Laffer, Boston Herald: Page 13,
   25 August 2021.
3. The Advocates of Socialism, Lindell Denham, Global Liberty Media, 23 February 2020.
4. Dems’ narrative on taxing the rich collapses, again, Andrew Wilford, Boston Herald: Page 14, 6 January 2022.
5. These Democrats are trying to raise taxes on the wealthiest Americans. Here's what they want., Riley Beggin,
   USA Today, 19 March 2024.
6. 5 reasons to make the Trump tax cut permanent, Stephen Moore, Boston Herald, 30 May 2024.