The Corner

Economy & Business

Psaki’s Continued Assault on Economic Reality

White House Press Secretary Jen Psaki holds a press briefing at the White House in Washington, D.C., September 22, 2021. (Evelyn Hockstein/Reuters)

White House press secretary Jen Psaki now claims that it would be “unfair and absurd” for companies to increase costs on consumers in response to higher tax rates proposed by Democrats.

The way the Biden administration talks about economics isn’t only transparently dishonest, it’s embarrassingly juvenile. Economic realities aren’t predicated on “fairness.” Perhaps in the progressive Shangri-La where a $3.5 trillion bill is “free” and throwing trillions into the economy helps lower inflation one has the luxury of pretending that taxes do not pass through to consumers. Companies are in the business of making a profit — and the bigger the profit the better. Otherwise, they do not exist.

This is how the economy grows. This is how jobs and technologies are created. These are the realities, unfair or not. Democrats have adopted a — sorry, I’m not sure how else to put it — fascistic notion that businesses exist to participate in the “common good” as dictated by the state (when they run it). If this had been the case over the past century, many of the great efficiencies and technological comforts you enjoy would probably not exist.

This rhetoric is an outgrowth of the extraordinarily stupid idea that “free” college and “free” health care exist. These are the same people who tell you there will be no serious trade-offs when greening the economy and artificially spiking energy prices. Good and services do not spring forth from the ether without costs simply because voters are big fans of windmills and community college.

The 2017 tax reform brought U.S. corporate taxes in line with most OECD nations. The Democrats’ proposal would likely create a corporate-tax rate that would amount to the highest among all advanced economies, and the largest tax increase since 1968. Now, if you believe that slower economic growth is worth the price of expanding government programs that’s one thing. But consumers and workers — higher corporate tax rates can also mean fewer workers, the scaling back of workforce, or cutting back the salaries and benefits of employees — of every economic stratum foot the bill. And there is nothing “absurd” about it. It’s just reality.

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