American Enterprise Institute spokesman Michael Strain tangled with Jared Bernstein over the proposed tax cuts, and it did not go well at all for him. In the end, he ended up agreeing with Bernstein and ceding every point, including his claim that cutting corporate taxes would somehow magically create jobs.
Ali Velshi led off the round by challenging the claim that there is any "line, crooked, straight, dotted, dashed" between what you can do with the tax code that directly results in hiring more people, and from there we were off to the races.
With scholarly aplomb, Strain deflected like a master, saying, "The question is whether or not over time certainly including time periods outside the ten-year budget window over the next 10, 15, 20 years. a lower statutory corporate tax rate and a lower statutory tax rate on pass through businesses increases the incentives for businesses to invest in the United States to grow or even to form if the first place and whether that in turn increases hiring."
Raise your hand if you wanted to hurl something at the screen while listening to that. Jared Bernstein certainly did, and he cut through all of the huffy-puffing.
"I've got to cut through this and get to the nub of it," Bernstein interrupted. "Our corporations are more profitable than they've ever been. "
"They're literally sitting on over $2 trillion of retained earnings. That's cash on hand. if they wanted to invest it, they could. if they wanted to borrow more, they could. at very cheap rates," he continued. "So this idea that you somehow have to bribe our corporations into investing more by cutting their rates further when they're already crushing it, it just doesn't seem to match the set of economic facts about how well the corporate sector is performing already. "
Strain tried to argue that even if that's all true today (and it is), it might not be true 30 years from now. What? You mean Reaganomics are just short-term hocus-pocus nonsense disguised as tax bonuses for millionaires and billionaires? Say it isn't so!
And then he had the nerve to say we've benefited from that dog of a "tax reform" bill. but that it was high time for corporations to have MORE. MORE.
Watch Jared Bernstein's face as Strain says that. He can barely contain himself. Neither could I. Basically, the AEI guy is admitting Bernstein is 100 percent correct about everything, but we need to give corporations MORE.
Stephanie Ruhle then reminded Strain that the types of businesses that are growing matter too. As she pointed out, automation is taking over a lot of what people used to do. Manufacturing isn't coming back to the United States.
Jared Bernstein then tied everything up in a bow so neat Michael Strain couldn't even argue with him. While agreeing that the top corporate tax rate could come down as part of a larger, true reform package, he also reminded everyone that President Obama had proposed that very thing.
"However, that's not what we're talking about here. We're not talking about tax reform," he reminded. "We're talking about tax cuts...We're talking about tax cuts that redound to those at the top of the scale."
Bernstein continued, "You're simply not going to help them if you cut taxes, I think massively at the top of the scale at the same time you're adding over $2 trillion to the deficit undermining your ability to invest in programs that i know Michael and I both share -- training, apprenticeships, boosting the earned income credit. the things that help middle income people."
"The corporate sector isn't hurting now. I don't expect it to be hurting "x" years from now. Yet I know who is hurting and I know who needs help and I know they don't get it in this plan," he concluded.
And with that, Strain ceded the debate to the guy with the facts. Share this widely, because it debunks all of the myths about "job creators" and tax cuts.
