Commentary

Stephen Moore: A Tale of Two Tax Cuts

By Stephen Moore | August 25, 2020 | 3:25pm EDT
A man proffers dollar bills. (Photo credit: Getty/Yuri Cortez/AFP)
A man proffers dollar bills. (Photo credit: Getty/Yuri Cortez/AFP)

Democrats keep attacking President Donald Trump's idea of a payroll tax cut for 140 million American workers. At the Democratic National Convention, Joe Biden said it would endanger Social Security. Senate Minority Leader Chuck Schumer of New York rejects the tax cut as "unworkable." House Speaker Nancy Pelosi dismisses the plan as a "tax cut for major corporations."

Maybe we should start calling them hypocrats. During Barack Obama's first term in office, when the economy was ailing as it is today, they were all for a payroll tax cut.

Under Obama, Pelosi described the payroll tax cut as "a victory for all Americans, for the security of our middle class, for the health of our seniors, and for economic growth and job creation." That's quite an endorsement.

What about the Democrats' time-honored scare tactic about jeopardizing Social Security? Biden said there was "no threat to social security" back in 2011. Pelosi said "no, I don't worry about [Social Security solvency]. I think the trust fund can handle that."

All of this is to say that Democrats were FOR the payroll tax cut (under Obama) before they were against it (under Trump).

But the level of hypocrisy runs deeper than that. The Trump plan would provide 140 million low- and middle-income Americans with roughly a $1,000 tax cut for the rest of the year. Trump's plan gives 100 percent of the benefit to those who make less than $100,000.

What is the Democratic alternative? They want a new tax write-off that will help...Bill Gates, Gorge Soros, Michael Bloomberg and other rich Democratic campaign contributors. They would do so by reinstating the deduction of state and local taxes from federal income taxes.

The Tax Policy Center, which is hardly conservative, finds that well over half the benefits of Pelosi's $600 billion tax scheme would go to the richest 1 percent. The average worker gets a grand total of $10.

That's enough to pay for a Big Mac meal with large fries and a cookie. Once a year.

You may wonder why Democrats support a tax dodge for the wealthy that adds virtually no stimulus to the economy. This is pure parochial, special-interest pleading. The tax filers who would gobble up almost all the benefits live predominantly in blue states: New York, New Jersey, Connecticut, California, Maryland, Oregon and Massachusetts.

Remember this the next time a liberal says Republicans only care about the rich.

Stephen Moore is a senior fellow at the Heritage Foundation and an economic consultant with FreedomWorks. He is the co-author of "Trumponomics: Inside the America First Plan to Revive the American Economy."

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