Ralph R. Reiland: The economics of envy & tax cuts
At a recent town hall meeting in posh Boca Raton, Fla., Nancy Pelosi called the tax-cut legislation signed by President Trump an act of “theft” and claimed employee bonuses being generated by the business tax cuts are “crumbs.”
It's hard to come up with a rational reason why the House minority leader would consider it “theft” when a tax cut permits taxpaying individuals and businesses to keep more of their own earnings from their labor and operations.
To label a tax cut as thievery seems rooted in the premise that government, or those on the receiving end of government's redistributive and spending activities, are the rightful owners of people's earnings and labor. Not all that dissimilar from this mindset that calls it “theft” when people are allowed to retain more of their own income is the radical “property is theft” maxim famously coined by French economist, mutualist and anarchist Pierre-Joseph Proudhon in his 1840 book “What is Property? Or, an Inquiry into the Principle of Right and of Government.”
In the book, Proudhon, the leading socialist thinker of the 19th century, maintained, rather bizarrely, that property “is Homicide,” property “is the Mother of Tyranny,” and, sounding the most similar to Pelosi, property “is the Negation of Equality.”
For Pelosi, as well, to describe bonuses that have already benefited millions of workers as “crumbs” from the rich paints a picture, set in Boca, of some fortunate 1-percenters driving alongside the ocean in their cherry red Lamborghini convertibles, tossing measly half-slices of old bread to squawking gulls.
In State of the Union fact-check coverage, USA Today business reporter Nathan Bomey quotes Trump on the link between his tax cuts and the subsequent bonuses: “Since we passed tax cuts, roughly 3 million workers have already gotten tax cut bonuses — many of them thousands and thousands of dollars per worker. And it's getting more every month, every week.”
Reported Bomey: “That's largely true. Walmart alone is handing out bonuses of up to $1,000 to some 1 million hourly U.S. workers and hiking its minimum wage to $11 per hour. No fewer than dozens of American companies have announced compensation increases in recent weeks.” At Walmart, $1,000 each for a million workers equals $1 billion in bonuses.
“There's a cartoon I just love,” said Pelosi, doubling down at the “Trump Tax” town hall meeting at Florida Atlantic University in Boca Raton. “There's a little mouse trap who's got a little piece of cheese on there,” she continued, “and there's a mouse about to take it and that's called the middle class. And around it are fat cats, they look a lot like elephants but anyway, around there. And that's the thing. Get this little thing and we get this big bonanza. You get the crumb, we get the banquet.”
Maybe Pelosi thinks the fat cats ate the mouse. Proudhon: property “is Homicide.” Or possibly, she's just saying it's unfair that a scrap of cheese isn't equal to a banquet. Proudhon: property “is the Negation of Equality.”
Ralph R. Reiland is associate professor of economics emeritus at Robert Morris University and a local restaurateur (email@example.com).