Updated April 17, 2018 –
With the passage of tax reform which took effect in 2018, you might think protests over taxes are irrelevant. Lest politicians forget, we should continue to remember the protests are just as relevant as they were five decades ago.
Furthermore, have you ever wondered why British groups like The Rolling Stones, The Who and The Beatles spent so much time touring abroad? To sell music for sure, but there’s another reason.
The reason is best explained in a 1960s’ protest song written by George Harrison. The tune was the opening track of The Beatles’ LP album, “Revolver.” It was Billboard Magazine’s No. 1 album starting in Aug. 1966 for six weeks.
Entitled, “Taxman,” the song ridiculed progressives — in particular, British Prime Minister Harold Wilson — for passing outrageous English tax laws. (Not to be gauche, but indeed the British star passed away at his adopted home of Los Angeles in 2001.)
England has always imposed high taxes but in 1966 the Beatles were viciously abused – led by the liberal Labour Party, the government super-taxed away 95 percent of their earnings. Yes, all but five percent.
“…though we had started earning money, we were actually giving most of it away in taxes,” complained the musician.
Hence, his song:
Fellow Beatle Paul McCartney further explained the reason for the Taxman in a 1984 interview with Playboy.
“George wrote that and I played guitar on it,” said Mr. McCartney. “He wrote it in anger at finding out what the taxman did. He had never known before then what he’ll do with your money.”
So, while the Beatles would be happy with President Trump’s tax reform, reasons for the tax-protest song still exist.
Political distractions on taxes
You might recall that not one Democrat voted for tax reform.
Afterward, as countless companies passed their tax savings and resulting profits to employees, you might recall House Minority Leader Nancy Pelosi (D-CA) infamously called the reform-inspired $1,000 to $2,000 employee bonuses “crumbs.”
This followed at least two liberal Democrats who didn’t kept campaign promises about taxes and spending.
For instance, Washington State Gov. Jay Inslee reneged on his no-tax-increase pledge in order to increase government spending by $1.2 billion.
In another blue state, Connecticut Gov. Dannel P. Malloy trashed Republican and Democrats’ budget plans in favor of a $1.5 billion increase in taxes and fees.
Both governors were elected after they promised no new taxes.
But they don’t understand the consequences.
Such public policies drive away businesses, which leads to less revenue. This means higher taxes on the businesspeople and individuals who can’t leave. The CEOs of Aetna and General Electric have complained bitterly about Connecticut’s imprudence.
GE “has assembled an exploratory team to look into the company’s options to relocate HQ to another state with a more pro-business environment,” then-CEO, Jeffrey Immelt was quoted in published reports.
OECD call for higher taxes
In another slap at American taxpayers, Congress has been funding an international organization that actually lobbies governments to increase taxes.
Founded in 1961 to research and publish economic data, the Organization for Economic Cooperation and Development (OECD) appears determined to destroy economic liberty. Why?
OECD, with a branding slogan of “Better Policies for Better Lives” is domiciled in Paris, France.
But Richard W. Rahn – a senior fellow at the Cato Institute and chairman of the Institute for Global Economic Growth – challenges OECD’s current mission.
In a June, 2015 article entitled, OECD would destroy prosperity, he wrote:
Competition is usually seen as desirable – whether it is in sports, business or tax and economic policies among governments. High-tax countries such as France hate the idea that other countries have lower taxes – which enables lower-tax countries to grow faster, provide more jobs at higher wages, and greatly improve the lives of their people.
France and other high-tax countries decided to use the OECD as their tool to prevent what they called “harmful tax competition.” Other things being equal, global businesses, quite understandably, are attracted to countries that have lower rather than higher taxes.
In the United States, there is a similar migration of both businesses and individuals from higher-tax states, such as New York, New Jersey and Connecticut, to lower-tax states, such as Texas and Florida. Most economists see such competition as healthy because it serves as a brake on bloated governments that have become inefficient and corrupt.
It isn’t surprising that OECD is headquartered in Paris. France has avoidable, severe economic problems.
Former French President Francois Hollande had campaigned on a promise to tax salaries of wealthy French individuals who earn more than one million euros (£830,000) at 75 percent. His scheme drew fire from the rich.
In 2012, the courts over-ruled him but he came back with a scheme to force the employers to pay the tax.
But there’s new hope for France.
French President Emmanuel Macron has kept his campaign promises, as evidenced by this headline: Macron slashes France’s wealth tax in pro-business budget.
Who knows? George Harrison might have soon been comfortable living in France. Surely, he would have liked the Trump tax reforms.
But keep the relevant protests coming until sanity about taxes prevails.
From the Coach’s Corner, related public-policy articles:
What Bill Gates Says about Donald Trump Will Surprise You — Mr. Gates astutely observes Mr. Trump was not elected “for specific policies” but for his “kind of leadership.” The tech icon also believes Mr. Trump has a message reminiscent of President John F. Kennedy.
Academic Study: Rich Pay More than Their Share in Taxes — The 2016 study by the National Center for Policy Analysis reveals the current tax code is highly progressive. It’s entitled, “U.S. Inequality, Fiscal Progressivity, and Work Disincentives: An Intragenerational Accounting.”
Update: Apple’s Irish Strategy to Avoid Paying Taxes — Goldman Sachs, Amundi SA and BlackRock are ostensibly managing about 13 billion euros ($16 billion) in the back taxes Apple will likely have to pay to Ireland.
5 Shocking Lessons from Donald Trump’s Taxes — In analyzing the mess from the mud-slinging over Donald Trump’s taxes, we can reasonably arrive at five conclusions.
Only Fiscal Sobriety Will Prevent Further Fiscal Chaos — We’re way past the deadline to demonstrate financial leadership. It’s time for economic fundamentals and teamwork focused on economic patriotism. As the world’s largest-economy, threats for a double-dip recession will only worsen unless the Unites States stops the fiscal dysfunction.
“If you’re overweight, I’ll tax your fat.”