As I hinted at last week, the Democrats’ biggest tax reform problem isn’t that the new legislation seems to have created a positive economic effect, but that it is undercutting the Left’s economic morality narrative.
Tax reform’s central challenge to Democrats is that it discredits their old “the rich are too rich, big corporations horde money and punish workers, and government must legislate more to right these wrongs” line. Unfortunately for Democrats, in the post-tax-reform choice of both major and midsize corporations to invest in their workers and their future profitability, the better angels of capitalism are shining forth.
Every day, more companies are pledging to hire thousands of new employees and increase their wages, and to repatriate billions, tens of billions, or even hundreds of billions in overseas cash. This all represents a vast new investment towards the nation’s future prosperity.
That matters electorally in that as more families find the connection between tax reform and better opportunities, Democrats will find their message a whole lot more difficult to sell.
After all, their message is the proud antithesis of a successful policy now on full display. In turn, when Democrats come knocking with promises of new taxes and regulation on corporations, voters might find themselves with some newly raised eyebrows.
Of course, the GOP and conservatives can’t take anything for granted. If companies are only responding to the tax legislation in the short term and choose to retain money in capital accounts, voters may push back against Republicans. At the same time, tax reform’s deficit boosting potential must be offset by serious spending cuts (that means entitlement reform). Conservatives must also continue to speak much more energetically about broader social policies: the costs of minimum wage laws versus skills based opportunity building, for example.
But as I say, Democrats have a problem. Over the last year, they’ve run further to the left, seeing Sen. Bernie Sanders’ socialist utopia as the winning recipe for their electoral rebirth. But now that capitalism is running proud and strong, their narrative is being nullified.
