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March 16, 2019 - Sargon of Akkad - Carl Benjamin
13:56
David Pakman Benefits from Trump's Tax Cut
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So, I watch David Pacman's channel quite a lot because I always tell people to watch from around the political spectrum when you're consuming news.
And David Pacman I find to be one of the most intellectually honest, apart from incidentally in his video response to me.
But I'm not trying to throw shade because I found it really interesting that he put up a video today in which he lets everyone know that in Trump's recent round of tax cuts, David Pacman received a very substantial tax cut and now he has a lot more money.
This is significant because David Pacman is not a millionaire or a billionaire.
He's not part of the gilded class at the very top of society.
He works hard to make ends meet.
For example, I spoke to him during the apocalypse crisis because his channel got demonetized along with the rest of us.
And he was struggling because he's got a show.
He seems to work really hard for what he has and he seems to do a good job, honestly.
Even if you don't agree with his bias and find that that clouds his judgment in some realms, well, in other realms, it doesn't.
And in other realms, he's actually a surprisingly good critic of his own side.
But when it came to him getting a tax cut, it was amazing to see his ideological perspective sort of kick in and override his innate instincts on the situation.
So I finalized my business taxes over the weekend and then my personal taxes, and I got a much bigger refund than I did last year.
Of course, the refund size doesn't really matter because your withholdings can change.
What matters is your effective tax rate.
My effective tax rate is way down.
Okay.
My effective federal tax rate for the 2017 tax year was 26.2%.
My effective tax rate for the 2018 tax year, which I just filed, is only 22.9%.
My tax rate effective has dropped on the basis of the Donald Trump tax plan by about 13%.
This is a really big tax cut that I got.
In my opinion, David Pacman absolutely does earn his money.
I don't think he's cheating anyone out of it.
I think he earns it completely legitimately and he deserves every penny that he earns.
So how does David feel about it?
Now, what did I do to earn that tax cut?
That's a really weird question.
Taxes aren't tailored for you personally.
They're tailored for earning brackets in a progressive tax rate, which I assume you have.
It's not that you don't need to earn a tax cut.
A tax cut is earned by hard work.
When you build a strong economy and you don't need huge social safety nets, then you earn it by being a better society that requires the government to do less for the citizens themselves.
This is what being free is: it's taking ownership of your own life, being the person who makes the decisions and is responsible for the consequences.
And when the consequences are you're hiring people, you're making other people's lives better, you're enriching them.
You're hopefully, I bet the people who work with you absolutely love their jobs.
I'm pretty sure the guys who are working with me absolutely love their jobs.
And I really hope they do.
You know, I really think this sort of thing, this kind of small-scale entrepreneurism, is way more, a way more healthy business environment than a giant faceless corporation run by executives that you've never seen.
Put simply, I think that the existence of David Pacman's channel creates more good than bad by quite a significant margin.
And I think it's a good thing that David is being successful and moral in the world.
I think these are fantastic things.
So, David, you've earned it by being what you are, man.
You've earned it.
You've earned that money.
And the money you've made is what your audience thinks you're worth.
You've earned it.
Or in your advertisers as well, presumably, which I suppose is connected to the audience as well.
So, dude, you've earned it.
You don't need to ask yourself why, why do I deserve a tax cut?
Because it's just generally better for everyone.
Because at the end of the day, it's your money to start with.
It's not the government's money.
You earned it, not the government.
You are not the property of the government.
So you earned that for yourself.
It doesn't actually belong to other people.
And I don't want my comment section spammed with a load of people saying that taxation is theft.
Now, what did I do to earn that tax cut?
Nothing.
Well, then it's a good thing that you don't need to do anything to deserve a tax cut.
Because inherently, everyone who has done any kind of labor to earn some money that they have to pay tax on has earned it already by doing the labor.
And you've done the labor.
So you don't need to do anything because it's already yours.
Now you're fulfilling the social contract.
We're going to have to have a government.
We're going to have to have law and order.
If we want all of these things, if we want the rule of law, and I'm absolutely certain we do, given the alternatives, then sure, we have to have a government.
But the question is, how much do we want it to do for us, isn't it?
That's the real question.
And that's the sort of the real liberal position.
The separation between the government and society and the recognition of the sovereignty and the self-ownership of each individual, which then goes up to make the society itself.
And so now David launches an attack at the tax cuts he has now received.
And I tell you what, I have no idea why.
And I don't think it's a winning policy for 2020.
Democrats, we're going to raise your fucking taxes.
I didn't do anything.
The David Packman show grew in 2018, not insignificantly.
And yet, my effective tax rate went down by almost 13%.
This is completely antithetical to the progressive mindset because they only view the world in terms of people who are utterly destitute and the ultra-rich.
If his taxes go down and his profits go up, he makes a lot more money and he has a medium-sized show that's really good for him as a business and him as an individual succeeding by running a business.
This is really great for him.
And it seems to be the opposite of what the progressives are advocating for.
And so I honestly, he seems like this is a moral conundrum.
There's something wrong, even though he hasn't done anything morally objectionable.
And neither is Donald Trump in regards to cutting the taxes.
There is no moral objection here.
So let's ask the question: is this good for the economy?
Why wouldn't it be?
Let's explore that.
Because the right says it's good to give tax cuts to businesses because they will produce more, they will hire more people, and it's going to be a big, big win for everybody.
Well, it goes further than just employing people to do things.
It's actually based around the transactions that are happening that I think the real, the sort of real meat of the issue is.
And I think that the argument that they make is if you have more money after you've paid your taxes, then you will buy more things and you will create wealth for other people in the spending of your money and end up growing the economy that way.
So yeah, it seems that that's the case.
It's like Milton Friedman's pencil example, isn't it?
You might buy one pencil, one pack of pencils from a shop because you had a bit of extra money that you thought you'd spend on stationery or something.
But that's tens of thousands of people all around the world who you're helping to employ.
And so you're making them richer than they were before by buying their product.
And so you having more money means you can buy more things, which means businesses will require more employees because they'll need to keep up with demand.
Now, I know where you're going to go with this, and I can head you off at the pass.
You can specifically buy recycled goods, or you can specifically buy things that are effectively non-material, like digital goods.
If you want, you can support someone's crowdfunding efforts.
You can do something with your money that you think is wise and you think will make the world a better place.
You can do that manually.
And that in and of itself is enriching other people and making the world a better place.
It's just not true.
Oh, okay, then.
I guess we better just give more money to the government.
I'm sure they're going to be a lot less wasteful than we will with our own money.
I mean, it's just not true.
My effective tax rate dropped from 26 to 22%.
Am I going to go hire more people now?
Of course not.
I hire people based on demand.
I hire people on the basis of whether I have work for them to do.
Why?
I mean, if your show's growing anyway and you've reached a point where you found yourself with extra money and if you don't personally need that money yourself or want it to go on holiday or do it, whatever it is you want to do or buy a house, if you think, well, I could reinvest this in the show by hiring extra people to do like extra research or production or whatever, whatever it is you need doing, why wouldn't you do that?
I mean, wouldn't it continue to exponentially grow your business?
You know, maybe hire an advertiser or something.
I don't know.
And the thing is, just because you personally might not do that, well, I would do it.
But here's the really important thing.
If I can take profits at 22% instead of at 26% tax, I am incentivized not to invest in my business.
Okay.
This is like just a key thing to understand.
I talked about this with Dave Rubin when he was on the show, and it wasn't clear that he understood it.
If I can earn profit and pay 26% or earn profit and pay 22%, what do I choose?
I choose 22%.
The lower effective tax rate is an incentive for me not to invest in the business.
Remember, if I invest in the business, I lower the adjusted income.
That saves me more if the tax rate is higher.
I am more incentivized to reinvest in my business if there is a higher effective tax rate.
Yeah, that'd be how it would work for me as well.
But you were incentivized in other ways to put money into your business.
For example, looking at your numbers going up.
That's a very high incentive to invest money in your business.
Even if that directly won't give you hard cash back from the government, then you're still going to make money in other ways.
So you're still incentivized to do it.
Giving you more money back at the end of that from lowering your taxes is still good for the economy at large, even if not specifically because you're going to be incentivized more than already to hire more people.
It's just a fundamental backwards element of the entire right-wing view around taxation.
This year, I paid 13% less on the profit that the business earned.
It's an incentive not to reinvest.
Yeah, okay, but even if you aren't being incentivized to do it, that doesn't mean that you are necessarily being disincentivized.
And maybe you just want to pay your employees a bit more.
Maybe it would just be worth it for other reasons that weren't simply financial.
There's no economically defensible reason for my tax rate to have dropped 13%, despite the fact that the David Pachman show grew.
Totally disagree.
Totally disagree.
Again, it's just better overall if you have more money, even if you aren't being directly incentivized to spend it in your business.
But let's be fair, you're an entrepreneur, you own your business, you're employing a few people.
Why wouldn't you help it grow?
Even if the tax rate isn't necessarily in favor of that and you're taking it out of your own profits in order to help make the business grow, what difference does it make?
And things, if you're feeling really guilty about it, David, could you not just donate money to the government?
Do you think they're going to refuse and say, well, we're not going to take donations?
And this applies to so many of the businesses that we are told, if we just cut their taxes, it's going to be great for the economy.
It's going to be good for everybody.
It's going to lead to hiring.
It's going to pump money into the economy.
It's not.
Yeah, Will.
Even if you personally aren't contributing to that, other people will.
I wasn't planning on that tax return.
I am not spending on the assumption that I am getting that tax refund, not return.
Well, I guess maybe you could do something impulsive with it, David.
Wouldn't that be a bit of fun for once?
And it's simply not better for the economy.
You keep saying that, but you seem to be ignoring the fact that you spend money in everything that you do.
So I don't agree that it's not better for the economy.
And I'm happy to hear a persuasive counter-argument from you.
Now, you might say, David, well, then just send in more money to the federal government.
That's not tax policy.
Me choosing to pay 26% instead of 22%, that's not policy.
That's not money that the government has budgeted for.
It's not money that would be used in any productive way when it's not actually expected to be tax revenues on the basis of a broader tax plan.
Me sending in more money is just one of those ridiculous, right-wing, sort of libertarian-ish, cartoon-ish ideas.
Well, that's lucky then, isn't it?
Because otherwise, you'd have to send the government some money that you otherwise wouldn't want to send them.
But that means, you know, that would be a ridiculous, cartoonish, libertarian perspective.
So you're not going to do that.
So you end up with a bit more money and you feel morally justified in complaining that you have more money, even though it's a win-win for like, well, everyone but the bureaucrats, I guess.
I mean, I love the reasoning.
Oh, no, no, no, they wouldn't expect it.
They'd just waste this.
There's a lot of that, David.
There is a lot of that.
But I think they wouldn't turn down free money if they were offering.
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