As corporate tax reform gets ever-closer to becoming a reality, opponents are shifting their strategy. Rather than asserting, as Senate Democrats wrote in a letter to Republican leaders, that “tax reform cannot be a cover story for delivering tax cuts to the wealthiest. We will not support any tax reform plan that includes tax cuts for the top one percent,” they will soon turn to “proving” that tax cuts benefit the rich at the expense of the rest of us, to use in future campaigns, even if it is not true.

Everyone Will Benefit Over Time

One indispensable part of their efforts will be to studiously ignore the inconvenient fact that, when economic arrangements are voluntary, they benefit all participating bodies, or individuals would not participate. In the absence of fraud or coercion (the first being government’s failure to protect citizens against criminals and the second being a government invasion on citizens’ rights), a person’s self-interest guarantees that benefit, regardless of what some imperfect measurements may say. 

It will take time for the positive effects on workers’ circumstances to appear.

Another part of their strategy will be ignoring the many clear mechanisms by which the rest of us gain from improved incentives for capitalists to use their resources for others.

Corporate tax reform hikes after-tax rewards for capital investments which provide tools for increasing worker productivity and earnings, as well as for innovation, advancing techniques and improving technology, risk-taking, and entrepreneurship, each in service of the rest of us as workers and consumers.

However, a major error accompanies such omissions but has gotten far too little attention. It takes time for owners of capital to fully respond to improved incentives so that it will also take time for the positive effects on workers’ circumstances to appear. Consequently, opponents who can get people to focus their attention on the short run, before the positive labor effects appear in the data, can lead them to overlook those benefits, almost all of which appear in the future.