Christmas Eve began with news that President Donald Trump had told guests at Mar-a-Lago, “You all just got a lot richer” thanks to the tax reform bill he signed on Friday. Liberals could not restrain their glee as this seemed to confirm all their worst assumptions about the “tax scam.” They claim it gives tax breaks to the rich while hurting the poor, and took Trump’s words as a confirmation.
Ill advised as Trump’s statement may have been, however, it did not support the liberal narrative. Only a view of the economy as a zero-sum game would necessarily mean that something good for the rich must be ipso facto bad for the poor. Trump might have meant that America as a whole will get a lot richer.
“You all just got a lot richer,” Trump told friends dining at the exclusive club, CBS News’ Kathryn Watson reported. At Mar-a-Lago, which has become known as the “Winter White House,” initiation fees cost $200,000 and annual dues cost $14,000, Watson noted.
The CBS report cited critics of the tax bill, who noted that “some aspects of the GOP tax overhaul — such as the doubling of the cap for the estate tax break and lowering of corporate and S-corporation taxes — disproportionately benefit the most affluent Americans.” In America’s “progressive” tax system that already taxes the wealthy more than the poor, tax cuts will naturally benefit the wealthy. (The poorest Americans already pay zero income tax.)
CBS News did admit, however, that the nonpartisan Tax Policy Center estimated 80 percent of Americans will pay less in taxes in 2018 and less than 5 percent will see their taxes increase less than $10.
That did not stop liberals from pouncing on the Mar-a-Lago comments, however.
Scott Dworkin, co-founder of the Democratic Coalition, said the president “was talking about his tax scam he had just signed into law. What a shady grifter & pathological liar.”
“You all just got a lot richer,” Trump said to friends during dinner at Mar-a-Lago Friday night. He was talking about his tax scam he had just signed into law. What a shady grifter & pathological liar.
— Scott Dworkin (@funder) December 24, 2017
Film producer Adam Best quoted Trump’s comments at a Missouri rally — “I have some very wealthy friends, not so happy with me” — and contrasted them with the Mar-a-Lago comments. “This GOP tax bill was a scam to hoodwink average folks, hook up the wealthiest Americans. This proves it,” Best tweeted.
“I have some very wealthy friends — not so happy with me” – Trump to voters at a Missouri rally
"You all just got a lot richer” – Trump to wealthy friends at Mar-a-Lago
This GOP tax bill was a scam to hoodwink average folks, hook up the wealthiest Americans. This proves it.
— Adam Best (@adamcbest) December 24, 2017
Trump’s Missouri statement does not necessarily conflict with the Mar-a-Lago comment, however. The tax reform law will cap the amount of state and local taxes (SALT) that taxpayers will be able to deduct from their federal income tax. This harms wealthier taxpayers in high-tax states like New York and California. It does not harm taxpayers in low-tax Florida.
Trump’s wealthy friends in New York may be angry with him over the tax reform law, while his wealthy friends in Florida benefit more from it. That does not prove the tax bill was a “scam” to help the rich at the expense of the poor.
Obama strategist and CNN political contributor David Axelrod said the tax bill “heavily favors the plutocracy,” and noted that Trump delayed his plan to head to Mar-a-Lago early — so he could sign the tax reform bill at the White House.
Someone in the WH figured out that a tax bill that heavily favors the plutocracy probably shouldn’t be signed at Mar-a-Lago.
— David Axelrod (@davidaxelrod) December 22, 2017
Rula Jebreal, visiting professor at the University of Miami, paraphrased what Trump’s remarks mean to the poor. “Trump to the poor AND the sick: ‘Obamacare has been repealed…I told people specifically to be quiet about it.'”
"You all just got a lot richer," Trump told his billionaire friends celebrating at Mar-a-Lago, hours after signing tax overhaul into law….
Trump to the poor AND the sick:
"Obamacare has been repealed…I told people specifically to be quiet about it.” https://t.co/91cvZgxtbT
— Rula Jebreal (@rulajebreal) December 24, 2017
In the same vein, Sen. Bernie Sanders (I-Vt.) told CNN’s Jake Tapper, “13 million Americans as a result of this legislation will lose health insurance.”
Sanders also noted that the corporate taxes are permanent while the lower individual rates are temporary — they will expire after ten years. “The bulk of the benefits in this legislation go to large profitable corporations and for millionaires and billionaires,” he said.
Senate rules dictated these moves, and the Bush tax cuts also expired after ten years. Before they expired, Congress renewed them, with little fanfare. In order to claim this tax bill hurts the middle class, Democrats have to assume the tax cuts will not be renewed, when they almost certainly will be.
As for the Obamacare line referenced by Jabreal and Sanders, the tax reform law does repeal one part of President Obama’s signature health law — the extremely unpopular individual mandate. The 13 million people Sanders says will “lose health insurance” aren’t targeted by the Republican tax bill. Rather, they will suddenly have the freedom to choose whether or not to purchase health insurance — and will choose not to do so.
The 13 million is an estimate of how many people, when forced to choose between buying health insurance they think they don’t need or paying a fine for not buying insurance, choose to buy insurance only because of the fine. In 2012, the U.S. Supreme Court ruled that this fine is a tax, so the Republican tax law strikes it down. The law does not remove health insurance from anyone.
On Sunday, after Trump’s comments became public, Georgetown professor Paul Begala flatly declared that Trump is “an autocrat who’s trying to enrich himself in office and succeeding.”
After Trump passed a tax bill that lowers taxes across the board, makes America’s corporate tax rate more competitive with other developed countries, and will likely unleash economic growth, the Democrats’ best argument is that all of this is merely a sham to enrich himself.
In reality, the tax cut — which Trump did not design or amend — aims to prime the engine of economic growth. Such a result would benefit the rich, but it would also lead to widespread job creation, better return on investment for the wealthy and the less wealthy who save, and technological innovations that spread benefits broadly in society.
If the poor and middle class find jobs and experience an increase in their standard of living, all while middle-income Americans pay less in taxes, it will not matter that much if the rich make more money. Even under this new tax bill, the highest earners will pay the lion’s share of the taxes.
Democrats will continue to harp on inequality — but if living conditions actually get better from this tax bill, Americans will notice.