Say what you want about "Saturday Night Live," that it may not be the barometer of our humor it once was, but it can still make a point with stunning accuracy.
Take the classic parody featuring Phil Hartman, Kevin Nealon, and David Spade in a group of men rattling off a bunch of cringe-worthy intentions — like telling the wife about an affair even though it's over — before playing a pickup basketball game. The product? Bad Idea Jeans.
We often see politicians doing the same thing, only with a straight face and true intentions, like Massachusetts Democrat Sen. Elizabeth Warren. On June 17, she gave a speech on tax policy that would fit right in with the ideas tossed off in the SNL ad.
If she intended to win the support of focus groups that like to hear calls for tax increases on billionaires and corporations to get them to pay their "fair share," she hit the mark on the nose. What that is, however, is code for taxing the heck out of them, regardless of the impact on workers, job creation, economic growth, and U.S. prosperity.
Her ideas might be funny if they weren't lousy policy:
Bad Idea No. 1: Democrats … passed a massive funding increase for the long-underfunded IRS
True. The horribly misnamed Inflation Reduction Act, which President Joe Biden made law in 2022, gave the U.S. Internal Revenue Service an $80 billion boost in funding. With that money, the IRS started gearing up to triple the audits of large corporations and increase the number of large partnerships under audit tenfold. The additional scrutiny is needed, politicians like Warren say, to catch tax cheats.
Really, she and others like her want to squeeze the middle class even harder.
When Rep. Adrian Smith, R-Neb., questioned Treasury Secretary Janet Yellen last year about the forthcoming increase in audits, Yellen acknowledged the number of audits of taxpayers making less than $400,000 would increase dramatically, as their share as a proportion of total audits would remain the same.
Secretary Yellen didn't deny it when Smith then said, "So, according to the data, we can expect up to 90 percent of the new audits to be on those making less than $400,000."
More audits overall are a bad idea.
Bad Idea No. 2: A two-cent wealth tax
Warren is the principal author of a wealth tax bill that she claims would raise $2.75 trillion over 10 years. As she explains it, "A two-cent wealth tax would pay for universal childcare, cancel all student loan debt, make technical school, two-year, and four-year colleges free, create a $5 billion investment in historically Black colleges and universities, and give every public K-12 school a million dollars to invest in the way that best meets their specific needs."
"Tax and spend" is back. You can do a lot when you raise taxes that much. As Prime Minister Margaret Thatcher pointed out decades ago, "The trouble with socialism is that eventually you run out of other people's money."
Moreover, the senator does not address the impact her wealth tax would have on the economy. History shows us repeatedly that the imposition of a two-cent tax today opens the door to higher taxes tomorrow. The top rate for the federal income tax when it was established in 1913 was just 7%. Within a few years, a lot more taxpayers were paying money to Uncle Sam, and the top rate had risen to 77%.
The wealth tax has been tried in several OECD [Organisation for Economic Co-operation and Development] countries. Most quickly abandoned it, in part due to its negative economic impact. As economist Daniel Bunn suggests, "With so many countries having adopted and then abandon [sic] a wealth tax, perhaps the U.S. should avoid adopting one in the first place."
A wealth tax is a bad idea.
Bad Idea No. 3: Democrats have a long list of ideas that raise taxes on the wealthy and big businesses
Most everyone has hobbies. Some people race cars. Others collect stamps. Progressive Democrats such as Warren apparently spend their leisure time thinking up new ways to raise taxes.
The latest IRS data shows that the top 1% of those who pay federal income tax shoulder 45.8 percent of the income tax burden yet earn only 26.3 percent of adjusted gross income. How much of the income tax burden does Sen. Warren believe these taxpayers ought to pay? More. Always more.
Unfair taxation is a bad idea.
Bad Idea No. 4: Better to let all the Trump tax cuts expire
Allowing the Trump tax cuts to expire would raise taxes on millions of low- and middle-income taxpayers. According to the nonpartisan Tax Foundation, "If lawmakers allow full expiration to occur, most Americans will see their personal tax bills rise, and incentives for working and investing worsen." Consequently, economic growth would suffer, leaving working Americans worse off.
Letting the Trump tax cuts expire is a bad idea.
Taxes are necessary.
Oliver Wendell Holmes Jr. famously declared, "I like to pay taxes. With them, I buy civilization."
But Senator Warren's politically and ideologically driven attack on American capitalism undermines the civilization Holmes sought to protect. Her priorities and proposals are misguided, if not downright dangerous. They are bad ideas.
Following a two-year stint in the White House as an Associate Director of the National Economic Council, James Carter served as a Deputy Assistant Secretary of the Treasury and Deputy Undersecretary of Labor for President George W. Bush.
Peter Roff is a veteran journalist now affiliated with several public policy organizations including Frontiers of Freedom. He can be reached at [email protected] and followed on social media @TheRoffDraft.
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