In a speech given earlier this year, journalist Chris Hedges warned that the near future “would be marked by global capital being unable to expand and generate profits at former levels.” He went on to say that, before, capital would begin to “consume the government, along with the physical and social structures that sustain it.”
Everything we know as part of the social contract, including social welfare, infrastructure investment, education, healthcare and ecological protections, “would be sacrificed to feed the mania for short-term profit,” Hedges said. The Republican Congressional tax bill that has passed both the House and Senate seems to prove Hedges’ analysis correct.
Most discussion of the tax bill has focused on the Republicans’ rushing of the process, desperate as they are to be able to say they’ve passed at least one piece of major legislation before the end of the year. This rush can be seen in handwritten notes in the margins of the Senate version of the bill that look like chicken scratch, if the chicken had suffered a serious head injury. However, this focus on the strategic rushing of the bill and its potential effects on the 2018 and 2020 elections misses the true issue at hand: This tax bill represents the culmination of decades of effort to gear America’s tax structure toward advantages for the most privileged among us.
With the minor differences between the House and Senate versions of the bill expected to be smoothed over in committee, both versions of the tax bill will add at least $1 trillion to the deficit (that’s with projected economic growth factored in) while redistributing wealth upward to the millionaires and billionaires. Barring unexpected Republican defections, all indications point to the bill being passed before the end of the year.
The vast majority of nonpartisan economists deny that the tax bill will lead to significant economic growth. Additionally, the nonpartisan Congressional Budget Office’s analysis shows that under this new tax scheme, by 2027, the combined annual tax obligations for those of us making between $40,000 and $50,000 will be $5.3 billion more per year, while that of people making over $1 million would be $5.8 billion less.
This is because the bill contains tax cuts that massively favor wealthy individuals while restricting state and local deductions that disproportionately apply to working families. The leadership of the party that constantly whines about Democrats’ redistribution of wealth seeks to redirect tax relief from working people to the already super-rich, i.e., themselves, their children and their political financiers.
That’s not a fiscally conservative tax plan. That’s class warfare.
The hole this bill is estimated to blast in the budget through lost revenues is justified by Republicans through the magical thinking of “trickle-down economics.” They say once we give a huge pile of money to the super-rich and corporations, the benefits will eventually reach working people through a reinvigorated economy.
There is no evidence for this assertion. Trickle-down economics has been a Republican article of faith since Reagan, and it has never borne the fruit they assured us would grow. Instead, this economic policy has consistently led to recessions while drastically contributing to economic inequality. Indeed, as the costs of healthcare and education rise steadily, middle-class wages have remained stagnant since the 1970s.
To call trickle-down economics a myth gives the discredited strategy and those whom champion it too much credit. Mythology implies that its adherents, while wrong, earnestly believe it. Rather, it appears Republicans are counting on this bill failing in order to justify gutting entitlement spending and other critical aspects of the welfare state.
Once their tax bill goes into effect and further tweaks America’s tax policies in favor of the rich, Republicans will surely use their remaining time in unified government to attempt to weaken or do away with entitlement programs like Medicare and social security. It’s nothing new, really. This is the same time-tested strategy of the corporate class in America: Weaken the government programs they don’t like until the public will accept cutbacks. Except this time, Republicans actually look likely to succeed, and the social safety net as we know it in America is in serious jeopardy.