Feb 27, 2018

MEMO | “Not One Penny” In Tax Relief

Post by Freedom Partners

The organization “Not One Penny” released a messaging memo intended to give Democrat lawmakers a roadmap to explain their opposition to tax reform, but instead shows the weakness of their arguments. The memo’s recommendation is to embrace class warfare, stir animosity, and leverage it for political gain. To do so, they plan to distort the facts, mislead taxpayers, and root against America’s economy.

Below are the three top messages from the memo, why each one will fall flat, and why none stand up to scrutiny:

RECOMMENDATION: FOCUS ON HOW THE TAX BILL “HELPS THE WEALTHY” AND “HURTS THE MIDDLE CLASS.”

The tax law doesn’t hurt the middle class or disproportionately benefit the wealthy. To make this argument, Not One Penny is relying on the expiration of the individual tax cuts – but they will only expire if tax reform opponents let them. The reason the individual cuts were not made permanent in the first place is because Democrats refused to support them, and Congress was forced to use reconciliation, which requires a 10-year sunset. According to the liberal Tax Policy Center, the bottom 99 percent of Americans – who pay roughly 60 percent of the country’s income taxes – will receive nearly 80 percent of the benefits of tax reform in 2018.

The vast majority (90 percent) of wage earners will see more take-home pay, and Americans are already seeing bigger paychecks. Additionally, hundreds of businesses of all sizes have already announced billions in new investments, more jobs, and more money for their employees – all as a direct result of tax reform. The nonpartisan Joint Committee on Taxation estimates that every income group will receive a tax cut, and even the Tax Policy Center estimates that four out of five Americans will receive a tax cut under the law.

To argue that the tax reform law disproportionately helps the wealthy is misleading and relies entirely on Democrats voting to end the individual tax cuts when they are up for renewal. Arguing that the tax law hurts the middle class is absurd.

RECOMMENDATION: FOCUS ON HOW THE LAW ENCOURAGES “CORPORATIONS TO OUTSOURCE JOBS.”

This line of attack will be difficult for two reasons: 1) it’s completely false, and 2) most Democrats are on-record saying the exact opposite.

Because of tax reform, companies are already starting to invest in new plants, equipment, and factory upgrades that will mean more jobs and higher wages. Small businesses have expressed record optimism and are more enthusiastic than ever about growing and expanding. And hundreds of businesses of all sizes have already announced billions in new investments, more jobs, and more money for their employees.

Furthermore, despite their current rhetoric on lowering business taxes being a “handout” to corporations, Democrats like Senate Minority Leader Chuck Schumer, House Minority Leader Nancy Pelosi, and Senators Claire McCaskill, Joe Donnelly, Heidi Heitkamp, and Sherrod Brown all supported cutting the corporate tax rate before it became politically expedient to be against it. Even more hypocritically, the reason they were supportive of cutting the corporate tax rate was the same reason Republicans supported cutting the corporate tax rate – to make America more competitive for jobs and investment.

Tax reform opponents can try to undermine the wave of positive news from tax reform by arguing that the law is a corporate giveaway, but it’s abundantly clear that these tax cuts are making American businesses more competitive and leading to more investment and expansion in the U.S. Just like they said it would.

RECOMMENDATION: FOCUS ON HOW MUCH THE TAX PLAN ADDS TO THE DEFICIT.

Many of the Democrats who voted against the tax reform bill turned around and voted for the recent so-called “bipartisan budget” deal. The difference was that tax reform let ordinary Americans keep more of their hard-earned money, the budget deal let Washington spend it. Born-again deficit hawks are going to have a tough time explaining support for a $1.5 trillion increase in government spending.

On the other side, history has shown that tax cuts consistently lead to more economic growth and more revenue to the federal government. An analysis of tax cuts under presidents Kennedy, Reagan, and Bush shows that revenue increased by hundreds of billions of dollars.

During the ten-year period following each cut, federal tax receipts increased by:

During the five-years following each tax cut, GDP grew:

This cynical and disingenuous campaign from Not One Penny is designed to ensure Americans don’t see one penny in tax relief. The Democrats who use these talking points should be called out for the half-truths and misleading statements and asked tough questions like whether they support allowing the tax cuts to expire, why they are flip-flopping on lowering the corporate rate, and how their newfound concern for deficits squares with their latest vote to increase spending.

Bill Riggs
Vice President, Communications
Freedom Partners Chamber of Commerce

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