Thursday, May 19, 2022

The Zinger That Wasn't


Some effort to award young Doocy a point over the new White House press secretary, Karine Jean-Pierre on Monday, in her official debut, on the part of this RealClear reporter:

I don't know whether the story is going to have any legs or not, but in the first place, everybody but billionaires and MMTers recognizes that raising taxes is a way to reduce inflation—inflation is when there's too much money circulating, and taxation pulls the money out of circulation. Though its effectiveness must depend on who or what is getting taxed, and what possible side effects it might have; some Bloomberg idiot at WaPo writes, for instance, that it can cause an overtime rejection crisis among the fed-up workers

But there is another effect of higher tax rates: They discourage workers from taking on extra hours, or employers from making productivity-enhancing investments. These effects shrink supply and tend to make inflation worse.

which sounds like a parody (especially since most factory workers supplying US consumer products don't pay US taxes, since they live and work in other countries). But I'm just saying Jean-Pierre might not have really believed he was asking the question, which is a little bit like asking how does light help green plants grow taller. something you're supposed to have a basic working idea of even if you think the reality is more complicated.

But there's another layer or two of misunderstanding involved. One of the topics covered in the briefing was the combat against inflation, but it wasn't about taxes:

Also today, the administration announced an Action Plan to Ease the Burden of Housing Costs, taking a series of actions to address one of the largest items in a typical family’s budget and one of the largest drivers of inflation in our economy.

As President, Biden has said tackling inflation is his top economic priority.  The best thing we can do to ease the burden of housing costs is to boost the supply of quality housing, including building more new homes and preserving existing federal support and market-rate affordable housing.

Doocy, on the other hand, wanted to talk about Biden's Twitter account, and Jean-Pierre wasn't perfectly prepared for that:

Q    The President’s Twitter account posted the other day, “You want to bring down inflation?  Let’s make sure the wealthiest corporations pay their fair share.”  How does raising taxes on corporations reduce inflation?

MS. JEAN-PIERRE:  So, are you talking about a specific tweet?

Q    He tweeted, “You want to bring down inflation?  Let’s make sure the wealthiest corporations pay their fair share?”

MS. JEAN-PIERRE:  Look, you know, we have talked about — we have talked about this this past year, about making sure that the wealthiest among us are paying their fair share.  And that is important to do.  And that is something that, you know, the President has been, you know, working on every day when we talk about inflation and lowering costs.

Wegmann misstated the question, in an amusing way: leaving out the corporations. It wasn't "How does raising taxes lower inflation?" but "Why should Jeff Bezos pay the taxes in question?" Literally, since the complaint Doocy was relaying came from Bezos himself

Bezos's Amazon, of course, is the king of corporate tax evaders:

  • Amazon avoided about $5.2 billion in corporate federal income taxes in 2021.
  • The company reported record profits of more than $35 billion (75 percent higher than its 2020 record haul) and paid just 6 percent of those profits in federal corporate income taxes.
  • If Amazon had no tax breaks, it would have paid 21 percent of its profits in corporate income taxes, or more than $7.3 billion. Instead, it paid $2.1 billion.

So that Jean-Pierre's answer to that question, "making sure that the wealthiest among us are paying their fair share... when we talk about inflation and lowering costs" is perfectly pertinent: "If we are going to combat inflation by raising taxes on somebody, then we should raise them on Amazon and the like."

It's also a key part of Biden's long-term inflation plan, as reaffirmed last week

Reducing the Deficit by Asking Large Corporations and the Wealthiest Americans to Pay Their Fair Share: While the federal budget deficit increased every year under President Trump – in part due to a reckless and unpaid for $2 trillion tax cut benefitting the wealthiest Americans and largest corporations –the deficit fell by $350 billion in President Biden’s first year in office because he prioritized rebuilding the economy from the bottom up and the middle out. And the deficit is now on track to fall by another $1.5 trillion this year. This matters to families because one of the main ways Congress and the executive branch can act to lower price pressures is to reduce the federal budget deficit. President Biden’s plan will make the wealthiest Americans and largest corporations pay their fair share, including through a new Billionaires’ Minimum Income Tax. By enacting reforms to make corporations and the wealthiest Americans pay their fair share, Congress can lower the deficit even more, while also lowering costs for families. 

Which is what Biden was referring to in his Tweet. Doocy could have asked Jen Psaki about it then, at the May 13 briefing—she would have been prepared, because it was one of the day's topics—but he didn't get a chance, because, like Roland Headley, he gets all his information from his Twitter feed.

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