Taxation
In
my last blog, I examined how Democrats work their payouts to their supporters,
so that they can retain, and hopefully expand, their winning collation. As I explained in that post, Social Safety
Net programs like Social Security and Medicare, are specifically designed to
help large swaths of the population in the hope that people who need those
programs will support the party that created them, in other words, prompt them
to vote for the Democrats.
And
the Republicans, to combat this, must engage in a strategy to make people
believe these programs are not sustainable, and then they must offer an
alternative carrot to the voters. The
one that they have fixated on is “Lower Taxes.”
Their point behind this is that if taxes were lower, people could put
money aside for their own old age. It
stresses personal responsibility over shared burdens. And honestly, like all public policies, it
has both a good side and a bad side, some truths, some lies. But at the end, it is simply an alternate
vision, designed to woo voters to their side.
Or,
I should say, it was, until the administration of George W. Bush.
Now
it is a harbringer of a sea change in American politics, one that can be read
to show that democracy is no longer really needed or desired. Until “W,” tax cuts were either targeted to
the poor, as in the Earned Income Credit (a Gerald Ford policy) or an across
the board tax rate reduction, as in the Regan Tax Cuts. These tax policies benefited a wide swath of
voters, and could be viewed as a way for the Republicans to combat the social
programs of the Left and draw in voters.
This actually worked for Reagan, who won re-election by an astounding
margin.
But,
with the Bush II tax cuts, something seemed to change. Although taxes were still cut across the
board, the bulk of the tax cuts were targeted to the super wealthy. In fact, the richer the person, the better
they did with the Bush Tax Cut. Since
2008, the Republicans across the country have doubled down on this policy, and
the bulk of the tax cuts have benefited multi-millionaires, basically the 1%
Club. Although crumbs are still thrown
at the Middle Classes, many, and sometimes most, people actually see their
taxes go up under current Republican policies.
The only uniform beneficiaries are at the top end of the tax rates.
At
the moment, people are still accepting this, because the story has been sold,
and bought, that the rich pay far more than their fair share. Even though this is true on a certain level,
progressive tax policy recognizes that Bill Gates can afford a 5 million dollar
annual tax bill far better than a minimum wage earner can afford a 500 dollar
one. I should note here, progressive in
this usage does not refer to the political left, it simply refers to the idea
that taxes increase the more money you make, and go down the less you
earn. Regressive taxes are the opposite,
and hit poor people harder than the rich.
Sales Tax, which is uniform, regardless of your income, is an example of
a regressive tax.
However,
the tax changes currently under consideration by Trump bring regressive
taxation to the fore. Two policies
especially are extremely regressive; removal of the child deduction and
elimination of the mortgage deduction.
These two policies are among the most progressive tax exemptions, as
poor and middle class people spend a lot more of their income, percentage wise,
on children and interest.
It’s almost like Trump could
care less about using tax policy to win voters.
In fact, this becomes very
similar to the payouts that you see in dictatorships and monarchies. This is because this payout affects only a
tiny percentage of the voters, and screws over the rest. In fact, from a political standpoint, this
would be very, very stupid, as the last thing you want to do in a democracy is
piss off a sizable percentage of the population.
Unless you no longer care
about democracy.
And this is where these
policies begin to terrify me. If Trump
was concerned about winning elections in the standard method, i.e. winning the
popular vote, he would want to make sure his agenda benefited the widest swath
of people. But what if he didn’t care
about that? What if he, and the
Republicans in general, were no longer interested in paying off a large segment
of the population? What if they were
only worried about gaining the support of a small, but very powerful, segment
of the population?
In that case, their policies
would look a lot like these; screw the bulk of the voters and further enrich
the already rich and powerful. That is
not the pattern of behavior in a democracy, where you have to please wide
swaths of the population, that is the behavior of a party unconcerned about
democracy.
In a democracy, you have to
get 51 percent of the people, or at least the voters, to vote for you. This doesn’t matter in a non-democratic
country, where the leaders are selected through some other method. And here, I would like to point out, despite
a earning 3 million vote margin, Hillary Clinton is not the president. So the finger of inequity is already on the
scales.
So, tax cuts that are
specifically targeted to the richest segment of society are casting light on a
real problem, one that may grow, unless we do something about it. Up until recently, these massive tax cuts for
the rich have gained widespread approval because of the aspirational nature of
American Society. We all expect to be
rich someday. In fact, most people
consider themselves to just be “temporarily embarrassed millionaires,” to quote
John Steinbeck.
However, income inequality
is beginning to raise its head, as many, maybe even most, people begin to
recognize their children will do no better in life than they did. Worse, many people have to face the fact that
their children will not do as well. The
aspirations are more and more becoming obvious pipe dreams. This very well
grounded concern is what actually pushed Trump into the White House, at least
if post election surveys are to be believed.
However, the actual policies
being enacted don’t follow from addressing the concerns of the
constituents. The actual policies are
very much those of an oligarchy, where the “peasants” have no voice. Why would this be?
Perhaps it is because they
know that they can ride this wave for a couple of elections, get their policies
enshrined in such a way that they will be hard to undo. Possibly they think that they can say that
the opposition to helping the poor was “too great,” and use that to fuel
outrage to gain even larger margins.
Perhaps this is simply a bait and switch operation, where they feel that
they can con the voters into voting against their self interest for years to
come.
Or it could be a much darker
reality.
Perhaps they have decided
that we are moving down a new path, one that doesn’t need millions of
voters. Possibly they no longer care if
people are happy, now that they have the majority. Maybe they think that democracy is a bad idea,
and they want to shift to something new, something that will pay off fabulously
for them at the expense of the rest of us.
It is possible they believe the democratic experiment has run its
course.
If this is the case, the
rest of us need to show them just how wrong they actually are.
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