The most insidious, long-term, result of this Republican sweep through our legislative waters will not be the dismantling or reduced funding of public institutions designed to protect the average American, like the Department of Education, the Department of Agriculture, the Department of Commerce, the Department of Energy and the Department of Health and Human Resources, it will be the fundamental codification of supply-side economics and the social privateering that will follow.
Supply-side economics, championed in the 80s as Reaganomics and most commonly referred to by the description of its intention as “Trickle-down,” is the theory that tax cuts and increased benefits for the wealthy and corporations will eventually benefit everyone in society. It is the sworn enemy of the progressive tax system that has been in place since the beginning of federal tax to pay for the Civil War. Progressive taxation imposes a lower tax rate on low-income earners and a higher rate on those with higher incomes.
The rationale for a progressive tax is that an alternative “flat” percentage on all income would place a disproportionate burden on people with low incomes. The dollar amount owed might be smaller but the effect on their real spending power would be greater and often put them below even basic costs of living.
The argument against progressive tax tables is that it destroys incentives to earn more money. However, history shows conclusively that they haven’t and wealth has been accumulated in massive proportions throughout our history even with higher tax rates. In fact, since the aggressive application of Trickle-down, the highest earners have increased their holdings so profoundly that we now measure wealth against fortunes in the hundreds of billions. Not for more people, but for an increasingly smaller percentage at the top who control a higher and higher percentage of America’s total wealth.
(More on Plutocracy later)
The argument that wealth is being penalized, however, still sells easily even to the people who would be hurt the most by flat or regressive tax policies. “Why should I be punished for earning more money?” is the commonly asked question that resonates down the ranks.
The simple answer is that ascending tax brackets are logical as they reduce the tax “burden” on those who can least afford to pay and it leaves more money in the pockets of low-wage earners who are likely to spend more of it on essential goods and services which, in turn, stimulates the economy and creates more opportunities to create wealth.
Believe it or not, it is the consumer class, the rank and file, the 90% who aren’t rich, who fuel the economy.
A progressive tax system also collects more taxes than flat taxes or regressive taxes because the highest percentage is collected from those with the highest amounts of money. Those with greater resources fund a larger portion of the services that all citizens and businesses rely on such as road maintenance, utilities, and public safety. Functions that enable wealth.
For the past 4 decades most new tax breaks and reduced tax percentages have systematically been given to wealth. Low and moderate incomes have seen little to no benefit leading to greater income inequality, which results in little help to the broader economy. Trump’s 2017 Tax Cuts and Jobs Act (TCJA) gave the largest tax cuts to corporations and the wealthy, and CEOs and other executives captured 81% of the wage gains. Trump has now promised to give them even more.
The TCJA was skewed in favor of wealthy business owners, with more than half of the benefit going to households with $820,000 or more in income. They can expect more breaks.
Over four decades of data shows that Trickle-down economics has actually reduced growth, and that tax cuts for the rich have had no meaningful effect on economic growth, as well as little effect on unemployment. What they have done is exponentially decrease upward mobility rather than “stimulate” the incentives it was allegedly created to increase.
What is “insidious” beyond the continued and expanded application of Trickle-down economics is the more damaging ideological upheaval it represents. It will be the demonization of the poor, already called “freeloaders” and “lazy” by the arrogance of advantage and prejudicial opportunities, and it will be the elevation of power to only a few Americans defined as uber-wealthy.
It is the establishment of oligarchy that diminishes, then devours, democracy and spits out it as its own- plutocracy. We can follow that toward Aristocracy, Monarchy, or any Authoritarian concept our prognostic fears desire.
We have charted a course with John Adam’s prediction that “democracy…wastes, exhausts, and murders itself. There never was a democracy yet that did not commit suicide”.
Along the way, the poor, the working class, even the downwardly mobile middle class, are ostracized and separated from the foundational promise of “Life, Liberty and the Pursuit of Happiness.”
I won’t be around when the extreme is realized; I’ll have fizzled away on reduced Social Security and cobbled together health benefits, long before King Donald VIII lays claim to all the seas, but I haven’t been in this fight for myself; it’s always been for my kids and future grandkids.
Failure would be to stop trying to correct the course that risks getting there sooner from larger mainsails spun with gold from our gold fillings. But how?
Mutiny.
Not with sabers and muskets or treasonous assaults on the Captain’s Quarters (wink wink) and not by making Captain Queeg or Bligh walk the plank.
(Let me know when you’re tired of the tall ship metaphors…too late? Ok, then…)
Mutiny, in the Republic we uphold, is informed voting. It is the original premise that there is no better guiding principle in a democracy than the informed voter. Being informed requires more than one source; it requires real data which can be an amalgam/synthesis of multiple sources.
It requires that we look at actual results and inform our local and state representatives to make policy from the socio-economic realities of their constituents. You can’t tell a voter from the local and state perspective there are hospital beds when there aren’t. Or that their wages will suffice when they don’t. Or that their water is clean when it isn’t.
That is where a legal and moral mutiny finds it voice and its strength; by keeping local and state government accountable for the reality of the conditions for those of us who row…this ship (sorry).
