The Moral Implications of Issues Related to Government Solvency and Tax Reform

Background:

Our elected officials claim they are trying to increase revenue through tax reform.

stats.oecd.org/Index.aspx?DataSetCode=REVUSA

The most recent tax bill was signed into law on December 22, 2017. The effects of the bill went into effect on January 1, 2018 and did not affect 2017 taxes. Corporate tax revenue is small compared to Personal Tax Revenue, of which a significant amount is collected after year end. While over 2/3’s of the non-government economy contributes through small businesses in the US, many large businesses were already paying well below the new .21 rate that resulted in abnormally large wage growth for US workers.

www.bls.gov/cps/tables.htm

-Raising the Corporate Tax Rate will not affect large businesses other than to decimate their competition. Having less small and medium size businesses decreases competition, wage growth, and opportunity for Americans.

-Raising the Capital Gain's Tax Makes American Investors unable to compete against the rest of the world and will greatly reduce American Wealth.

-Raising Taxes on people who make over 400K a year will make them less likely to work, train and show other people how to run successful businesses, and decrease money velocity in the economy.

All in all, in my opinion, from a macro perspective, it looks like the last tax bill increased money velocity, which increased revenue to the Federal Government.

Disclaimer:

Please note the below is mostly sarcasm, but the last round of tax cuts really did increase revenue to the government prior to COVID.

Sarcasm:

Good afternoon,

Apologies for not commenting on the immigration Issues the media is distracting the American public with as our elected leaders focus on destroying the country through tax reform. However focuses on one issues at a time tends to move conversations forward.

It is a well known that the rich in this country hoard their money like Scrooge McDucks, to ensure that poor people are not allowed to have any money. From the time the first dollar rolled off the printing press, they have just been gobbling them up so poor people cannot have them. Also there is a set amount of them, and no other types of wealth.

As those who camped out in front of Wall Street would tell you, if you stole all the Billionaire’s wealth in this country, and divided it up, everyone could get at least 1,400 dollars. Of course, we would then not have companies like Amazon, the stock market would crash, and what few non-government jobs remain, would be for the benefit of other countries’ Sovereign Wealth funds. But I digress, as all of this is unimportant considering the moral implications our elected leaders are facing.

How are we to weigh our envy of other people’s things against the possibility of earning higher wages and optimizing tax revenue for the federal government that is quickly becoming insolvent. My opinion is, we can just look the other way and not speak up about it. As someone whose views on the economy tend to be more classical, I cannot rationally argue why the new tax plan should be enacted.

I found the argument for the newly rejected minimum wage increase interesting, as it seemed to have a positive effect on Seattle when tested. I was expecting more dead weight loss, from the inefficient gap between what employer’s where willing to pay and what potential employees demanded, than what occurred in Seattle. Of course, I had concerns that 7 dollar lattes may not be the norm in other parts of the country, but I was morbidly curious as to how it would play out.

I think considering inflationary pressures, it could have reduced the effect of wage stickiness in the coming years in most parts of the country. However, it may make more sense just to tell the pets they are able to disclose their wages to each other. I understand some people may be embarrassed about their present wages compared to others. However, if everyone wore a name tag with their salary and job title everywhere, I think it could reduce this inefficiency, and the initial social discomfort of such conversations will recede over time.

Also, of note, is that this tax increase may seem like a political ploy to blame the bankruptcy of the Country of the last administrator. This is concerning because I like to act like I am in the moral right. However, is not like our envy will be remembered. So, I ask, “What does it matter? How is this our responsibility?”

I don’t think it is our responsibility, I didn’t even vote. Anyway, my guess is, when this time period is written about in the history books, COVID will not be mentioned. It will probably read something like, “Even though the new administration urgently raised taxes back to historical norms, the damage was already done. The largest increase in tax receipts in the history of the United States fell short of balancing the budget.” So, who cares?

Warmest Regards,