I wonder how the people of Wall Street and the infamous swamp felt in 2016 when they heard Trump rail against lobbyists, hedge fund managers and CEO’s all taking advantage of the forgotten people. They are surely relieved by the Christmas present bestowed upon them now.
Disguised and promoted and promised as a middle-class gift, the new tax bill does nothing to close loopholes or ensure the Top 20 percent contribute their fair share. Their portion of tax relief is huge and is borrowed against the future. Trump’s declaration about the bill not helping him? It’s as trustworthy as the other thousand lies of his first year. Selling this as help to the middle class? A completely cynical con job. Income inequality is a dangerous force damaging American society and is compounded by this tax law.
Behind the curtain, one long-held Republican goal is reducing the size of the government, aka “starving the beast.” The ballooning of the deficit will erode revenue resources, setting up an attack on Social Security and Medicare next. Since less government means less oversight, expect to see reduced enforcement of basic protections for American consumers and citizens.
The second and more immediately pressing goal was the need for a legislative achievement in an unproductive year despite complete control of the government. Their benefactors have flatly expressed that no campaign money will be forthcoming without results, so Republicans cynically presented a bill that blatantly serves their donors first and the rest of the country a dismal second.
Republican theory assumes a rapidly expanding economy will fill the $1.5 trillion void in the budget. It is a cherished belief that reducing the corporate tax rate will suddenly prompt a corporate groundswell of concern for the American worker and lead to an expansion of the workforce and the creation of large numbers of new, well-paid jobs while swelling the tax rolls. This fantasy defies experience. Most businesses reject even raising the minimum wage.
Corporate profits have ballooned over recent years. CEOs earn on average 300 times what workers earn. Corporate wealth has not seen expansions or higher wages for workers, instead it finances mergers and stock buybacks that only serve to fatten the wallets of officers and shareholders. As that money flows upward, we see fewer research programs, fewer pay raises for workers, and higher prices as consolidation means less pressure on providers of services.
Repealing the estate tax, another Republican wish list item, works to keep fortunes intact for winners of the birth lottery. The Walton family is roughly worth more than 40 percent of American citizens. Workers at their stores are often forced to collect welfare and other assistance due to the low wages paid by Wal-Mart.
Short of widespread wage increases creating more disposable income for a large swath of consumers and creating demand for more products, it is difficult to envision large increases in American jobs. Putting more money into the pockets of the majority of Americans translates to a need for more services and widgets. More demand means more workers to fill the need. Redistributing the money upward results in more savings for an already comfortable 20 percent. More money in fewer hands means less money circulates.
Republican orthodoxy says that money will overflow from private pockets at the top and ripple through the economy enriching everyone. The Reagan years made shirking the responsibility to contribute acceptable. As a result, we see the decay of infrastructure due to loss of revenue for improvements and maintenance and the bleeding of the lower classes, those powerless to pay for legislative favors or lobbying groups.
Estimates vary, but most sources show that the Top 20 percent own 84 percent of the wealth. Most average wage earners will get tax cuts with this bill, but the proportion claimed by the well-off far outdistance the effects for the rest of us. Income inequality is promoted by expanding the top earners share of wealth. Upward mobility in the U.S. has largely disappeared. Most don’t realize the wealth owned by the top earners.
Republicans count on voters believing that wealth at the top benefits all, but what it really buys is economic and tax favors. It didn’t work in the Gilded Age, or in the 1920s, and will not work now. Future generations will suffer from an expanded deficit. Income inequality will choke progress. Remember this tax bill the next time you vote. Hopefully it will not take another Great Recession to end this fantasy.
Steve Foreman is a Warren County resident.