Notes for a Counterrevolution

With the passage of the Republican tax bill, the economic coup by the plutocracy against the people of the United States is nearly complete.  All that remains is to shred what is left of the safety net in the name of fiscal responsibility — and we can anticipate a concerted effort to accomplish that before the midterm elections.  What can Democrats do about it?

A coup requires a counterrevolution, not incremental "improvements."  None of the suggestions that follow are remotely possible before the 2020 elections, and even then they stand little chance of implementation: not all plutocrats are Republicans.  It's nice to dream, though.

First, the corporate tax rate should be reduced to zero.  Next, virtually all income, including wages, pass-through income, dividends and capital gains should be taxed on the same progressive scale.  Income reinvested in businesses thus would be tax-free, but all income distributed to individuals would be taxable.  Interest income, which encourages savings and the loans that finance economic expansion, would be tax-free.  Payments to foreign investors, who own a bit more than 20% of the US economy, would be taxed at internationally competitive rates.

All income should be taxed to finance Social Security, Medicare, and Medicaid, and all caps on taxable income should be removed.  To make American businesses more competitive with each other, anti-trust laws must be strengthened and vigorously enforced.  Vertical as well as horizontal combinations need closer scrutiny.

The devils can be worked out of the details with implementation, but since none of this is likely to happen anyway, I'll just leave the details to the economists.

Money Matters

“I’m doing the right thing, and it’s not good for me. Believe me.”

Rule of thumb: every time Tr*mp says, "Believe me," he's lying.  The Republican tax plan, whatever it turns out to be, will be great for him.

At the moment, the tax and budget proposals are too vague for fiscal analysis — a big plus from the Republican perspective because that makes it impossible for the CBO or anybody else to estimate their real impact.  What is clear is that they depend on the same supply-side fairy tale that has failed to produce a happy ending since Arthur Laffer first drew his magical Laffer Curve back in 1974.

Despite the threat of immense budget deficits, the "deficit hawks" are silent — predictable, since they never really cared about deficits.  What really bothers them is the thought of government spending on anybody not already a multimillionaire.

Some proposals, like ending the inheritance tax, probably are included as "giveaways" to be "sacrificed" in order to get the big-ticket items, like the hyper-expensive tax cut for "pass-through" income.  Hopefully, though, there will be ample fractiousness among mega-rich factions to ensure that nothing at all gets done.  Fingers crossed.